7th Jan 2025 10:47
(Alliance News) - Growth in the UK construction sector hit a six-month low in December, numbers on Tuesday showed.
The S&P Global UK service purchasing managers' index fell to 53.3 points in December, from 55.2 in November. The reading stayed above the 50 point neutral mark, suggesting output growth was still accelerating, albeit at the slowest rate since June.
"Looking ahead, around 48% of the survey panel predict a rise in output over the course of 2025, while only 15% forecast a decline. The degree of positive sentiment picked up sharply since November, but it was still much weaker than seen in the first half of 2024. While construction firms typically commented on optimism linked to long-term business expansion plans, many also cited worries about the general UK economic outlook and tighter budgets for capital spending," S&P Global said.
House building remained the weakest-performing area, with activity decreasing for the third consecutive month.
Total new work remained at a six-month low, with anecdotal evidence suggesting that cutback to residential developments had offset the benefits of improved tender opportunities in the commercial sector.
Construction companies reduced their input buying for the first time in eight months and subcontractor usage declined, as their rates saw the fastest rise in 20 months. Purchase prices continued increasing "at a robust pace that was only slightly softer than November's one-and-a-half-year high," according to S&P Global.
Low hiring rates were attributed to "elevated cost inflation and rising salary payments" and job creation remained below the pre-pandemic average.
The construction PMI panel consists of around 150 construction companies. Responses were collected between December 5 and 20.
By Holly Munks, Alliance News reporter
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