2024.01.0510:26:00UTC+00UK Construction Downturn Eases In December

UK construction activity remained in contraction at the end of the final quarter, though the pace decline was the softest in four months, survey results from S&P Global showed on Friday.

The Construction Purchasing Managers' Index, or PMI, rose to 46.8 in December from 45.5 in November. The score was expected to increase to 46.0.

However, any score below 50 indicates contraction in the sector.

A sustained slump in house-building activity was the main factor behind the continued deterioration in construction output, linked to elevated interest rates and subdued confidence among clients, the survey said. Nonetheless, the rate decline eased to the slowest since July 2023.

Civil engineering activity also posted a softer pace of contraction, while commercial construction declined only marginally in December.

New orders received by British construction firms decreased at the slowest pace in four months, while employment showed a renewed rise, though modest overall.

On the price front, cost burdens decreased for the third month, and competition for market share among suppliers led to price discounts at the end of last year.

Construction companies indicated somewhat upbeat business expectations for output levels over the next year, as 41 percent of the survey panel anticipates an increase in business activity over the course of 2024, while only 17 percent predicts a decline.