Data released by S&P Global / CIPS showed that activity in the construction sector declined in December, reaching a 6-month low, while new order growth moderated for the third month running.
UK construction PMI fell to 53.3 points from 55.2 points in November. Economists had expected a decline to 54.4 points. An index value above 50 points indicates an expansion of activity in the sector. The index demonstrates the expansion for the 10th month in a row. The latest reading was the lowest since June, but still signaled a solid upturn in overall construction output.
The report showed that two of the three categories of construction recorded expansion activity in December. Commercial activity was the fastest-growing area (index at 55.0), followed by civil engineering (52.9). That said, both categories saw a slowdown in the rate of business activity expansion since November. Residential work was again the only category to register an overall decline in output (47.6). House building activity has now decreased for three consecutive months and the latest reduction was the fastest since June. New orders in the construction sector rose again in December (for the 11th month in a row), but the rate of growth slipped to its lowest since June. Meanwhile, the pace of job creation remained lower than the pre pandemic average. As for the inflationary situation, data indicated the fastest rise in rates charged by sub-contractors for 20 months. Purchase prices increased at a robust pace that was only slightly softer than November's one-and-a-half-year high. Latest data also signalled upbeat business expectations across the construction sector, but the degree of optimism was still much weaker than seen in the first half of 2024.