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UK construction activity last month fell at the fastest pace since May 2020, as housebuilding plummeted due to weak demand amid low consumer confidence and poor economic growth, according to a closely watched survey.
The S&P Global UK Construction Purchasing Managers’ Index, which tracks growth in the sector, fell to 44.6 in February, down from 48.1 in January and its lowest for nearly five years.
The figure released on Thursday was also below the neutral 50.0 threshold, indicating a majority of businesses reporting a contraction and worse than the 49.5 forecast by economists polled by Reuters.
Residential building decreased for the fifth month in a row and was the weakest-performing area of construction activity in February, with an index well below the 50 mark at 39.3, according to the survey.
Aside from the coronavirus pandemic, the rate of decline for housebuilding was the fastest since early 2009, with survey respondents often citing weak demand conditions, headwinds from elevated borrowing costs and a lack of new work to replace completed projects.
Tim Moore, economics director at S&P Global Market Intelligence, said: “Sharply declining order books rippled through the UK construction sector in February, which led to accelerated reductions in output volumes, employment and input buying.”
“Weak demand conditions were attributed to entrenched caution among clients, against a backdrop of subdued consumer confidence and lacklustre economic performance,” he added.
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