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The sharpest pace of job losses since October 2020, drops in new orders and lower volumes of construction output for three consecutive months took the headline S&P Global UK Construction Purchasing Managers’ Index™ (PMI®) to 46.4 in March. Although this was up from a 57-month low of 44.6 in February, it was still well below the neutral 50.0 threshold, indicating a solid pace of contraction.
Civil engineering (index at 38.8) was the weakest-performing area of activity, thanks to delayed decision-making, and a subdued pipeline of major infrastructure work. Residential construction activity fell at a slower pace than in February, but still well inside negative territory (44.7). Commercial building (47.4) deceased only moderately, although the rate of contraction was the fastest since January 2021.
Confidence across the construction sector slipped to its lowest since October 2023. Some firms nonetheless noted positive sentiment regarding the outlook for demand across the renewable energy sector and hopes of a turnaround in infrastructure workloads. Mirroring the trends for output and new work, latest survey data indicated a reduction in staffing numbers for the third consecutive month, the steepest since October 2020.
Tim Moore, Economics Director at S&P Global Market Intelligence, said: “March data highlighted a challenging month for UK construction companies as sharply reduced order volumes continued to weigh on overall workloads. Commercial work also saw a headwind from delayed decision-making on major projects, largely due to worries about the impact of rising global economic uncertainty. The downturn in residential construction activity nonetheless eased since February, providing a source of encouragement despite ongoing reports of sluggish demand conditions. Construction companies remained cautious about their year ahead growth prospects, as fewer sales conversions and a third successive monthly reduction in total new work hit confidence levels. Overall business optimism slipped to its lowest since October 2023.”
