Survey shows construction activity in the UK has experienced largest monthly decline since the early days of Covid-19

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9th October 2023 19:24 - Construction

Survey shows construction activity in the UK has experienced largest monthly decline since the early days of Covid-19: According to a widely observed survey, UK construction activity has experienced its largest monthly decline since May 2020.

The significant downturn in housebuilding resulted in a more substantial fall in September than expected. 

The S&P Global/Cips UK construction purchasing managers' index dropped to 45, a sharp decrease from August's 50.8 and well below the economists' forecast of 49.9. 

When the index is below 50, it indicates that most businesses have reported a contraction in activity. This data provides additional evidence that the Bank of England's intended higher interest rates are impacting demand in the UK economy to combat high inflation.

Another survey published by the Bank of England suggested a continued cooling in the labour market. Despite a series of interest rate increases, the BoE maintained its rate unchanged at 5.25% in September. 

Construction companies attribute this slowdown to cutbacks in new residential development projects due to sluggish demand and rising borrowing costs. The residential sector recorded the lowest reading of 38.1, indicating its most significant downturn since April 2009, excluding the period when the construction sector was shut down during the coronavirus pandemic. 

Additionally, commercial and civil engineering activity also contracted in September after solid growth observed throughout spring and summer. 



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