UK December construction PMI 53.3 vs 54.4 expected

UK construction activity slows to six-month low as house building keeps a drag on the overall sector. Total new work was seen rising at its slowest pace since June but at least business optimism picked up after hitting a 13-month low in November. S&P Global notes that:

“December data highlighted a loss of momentum
for construction output growth, with all three main
categories of activity posting weaker performances than
in the previous month. Commercial building maintained
its position as the fastest-growing area of construction
activity, followed by civil engineering. In contrast,
residential work decreased for the third month running
and at the fastest pace since June 2024.

“The slowdown in overall construction output growth
reflected more subdued demand conditions in recent
months, as illustrated by a further moderation in new
order growth during December. Survey respondents
commented on headwinds from elevated borrowing
costs and the impact of fragile consumer confidence.

“Staff hiring picked up since November, but there
were signs of tight supply conditions. Sub-contractor
availability improved to the smallest extent since March
2023, while the rates they charged increased at the
fastest pace for just over one-and-a-half years.

“Concerns about the demand outlook weighed on
construction sector growth expectations for 2025.
Although confidence recovered after a post-Budget
slump during November, it was still much weaker than in
the first half of 2024. Many firms reported worries about
cutbacks to capital spending and gloomy projections for
the UK economy.”