Buyers report construction “stuck in the mud”

Grant Prior 4 weeks ago
Share

Construction buyers reported a fall in business activity during December as new orders also dropped at the fastest rate for over two-and-a-half-years.

The bellwether S&P Global/CIPS UK Construction Purchasing Managers’ Index was 48.8 in December, down from 50.4 in November and below the crucial 50 no change mark for the first time since last August.

Commercial construction was the only rising sector at 50.3 on the index while civil engineering and house building contracted at 46.8 and 48.0 respectively.

Sentiment among firms towards the year-ahead outlook for activity dipped into negative territory for only the sixth time on record, reflecting fears around the near-term economic outlook.

Dr John Glen, Chief Economist at the Chartered Institute of Procurement & Supply, said: “The construction sector was stuck in the mud in December with the steepest fall in activity since the beginning of the pandemic in May 2020 and a similarly fast drop in pipelines of new work.

“House building saw a notable change of direction, with a mix of higher inflation for raw materials and transportation and the squeeze on affordability rates for mortgages resulting in fewer house sales.

“The sector subsequently fell back into contraction for the first time since July.

“Civil engineering, responsible for larger projects, continued to be the weakest performer again, with a sixth month in the doldrums as uncertainty about the UK economy reared its ugly head again and customers hesitated.

“Supply chain managers reined back spending on materials with the sharpest fall in buying activity for over two-and-a-half years as a result of this poor demand.

“Optimism remained very flat and at one of the starkest rates in the survey’s history.

“Builders were reining back on recruitment unconvinced there will be enough growth in the UK economy in 2023 to justify additional expenditure when margins remained so squeezed.

“Builders are fast running out of the resilient spirit maintained over the last couple of years as the blocks to success piled up and the winter of discontent with high inflation, strikes and shortages continues.”

Latest news

Average self employed labour rates top £1,000 a week

Average weekly earnings reach high for skilled trades
6 hours ago

BAM wins £49m Harrogate Convention Centre revamp

Local council hopes to sanction work start this autumn
5 hours ago

Renaker to top-out Manchester with 71-storey skyscraper

Developer lifts the lid on planned five-building cluster for phase 3 of Great Jackson Street development
13 hours ago

Costain bridge lift delayed by ground conditions

National Highways chiefs postpone planned lifting operation
5 hours ago

Nexus sells utilities and EV contracting arms for £78m

Group to now focus on remaining business at south east housing civils contractor Tamdown
5 hours ago

Speller Metcalfe lands lead role on £40m Tamworth revamp

Town centre to be transformed under ambitious plans
5 hours ago

Scaffold boss banned over covid loan abuse

Eleven-year director ban after misuse of £50,000 loan
24 hours ago

Gove issues six weeks ultimatum to sign building safety contract

Developers told to sign Government contract issued today or be banned from building homes
1 day ago

Firm fined £120,000 for lifting two builders in a telehandler bucket

Rochdale builder Hoyle Developments fined after repeated safety breaches
4 days ago

Hunt quashes reports HS2 will stop at Old Oak Common

Chancellor says no "conceivable circumstance" where HS2 would not terminate in Central London
3 days ago

London Chiswick roundabout 24-storey tower approved

Plan for 255 flats and offices finally passed after four previous schemes failed to proceed
1 day ago

Construction forecast to fall by nearly 5% this year

Private new build housing and RM&I to drive fall but infrastructure growth will also slow
1 day ago

Mace wins green office block at famous Fleet Street pub site

Contractor to build new 12-storey block pioneering latest sustainable construction methods
1 day ago

Firms readied for raft of net zero and building safety frameworks

Procurement specialist LHC to tender five mission zero retrofit and building compliance deals
4 days ago

Plans in for two Derby city centre schemes of 1300 homes

Eagle Quarter and Bradshaw Way schemes to breathe life into Derbion centre area
4 days ago

United Living names new infrastructure services MD

Former SSE Contracting operations director John Farrell joins multi-service contractor
4 days ago

Sunak promises Bill to build £100m Holocaust Memorial

Holocaust Memorial Bill will update historic legislation allow the building of a new memorial in London
4 days ago

Mace Interiors to transform Hanover Square office block

Refurbishment work to start this year on major revamp of Mayfair building
5 days ago

Garden village in Darlington gets £43m infrastructure cash

Transport and highways work will pave way for 2,000 new homes
5 days ago

Plans in for Lendlease £1.9bn Birmingham Smithfield scheme

Ambitious plans for City's old market area advance with enabling works hoped to start this year
6 days ago

TClarke on track for £500m turnover this year

Building services specialist sees 2022 revenue and profit up by around a third
5 days ago

McAlpine tenders M&E work at £340m Museum of London job

Demolition and first MEPH work packages come out to bid
5 days ago

BAM signs off on £65m Manchester First Street office job

Briggs & Forrester lined up for MEP package
5 days ago

Eurocell gets £1m insurance payout after cyber attack

UPVC giant details cost-cutting round as market weakens
5 days ago

Mace on board for £440m Manchester Airport upgrade

Green light for second phase of airport transformation programme
6 days ago

Inland Homes losses now set to hit £91m

House builder sells land as construction problems and slower sales wreck balance sheet
6 days ago

Plans in for Stoke on Trent city centre mixed-use scheme

Etruscan Square scheme consists of an arena, 300 homes, hotel and multi-storey car park
6 days ago

Landsec unveils latest £850m Buchanan Galleries plan

Subject to planning, earliest date for first construction would be summer 2024
7 days ago

Van Elle soars to record revenue in first six months

Revenue up a third to £80m at piling specialist with improved order levels ahead
6 days ago

Work starts on BSI Kitemark for MMC homes

Government backs new British Standard to lift barrier to modern methods of construction
6 days ago

Contractor services