PMI index stays stuck below key 50 number indicating growth

The rate of decline in output eased for the second month in a row in September, the bellwether S&P Global UK Construction Purchasing Managers’ Index has revealed.

The S&P Global UK Construction Purchasing Managers Index edged up to 46.2 in September, up from 45.5 in August – which itself was up from the 44.3 score recorded in July which was the sharpest rate of decline since May 2020.

September’s reading was still below the 50 no change score and meant the figure was the ninth month of contraction.

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Activity stayed below the crucial 50 mark, indicating no change, for the ninth successive month. A score below the figures indicates contraction

All three sectors measured were stuck in reverse but there was a weaker fall in residential building work, with a score of 46.8, while activity in civil engineering fell at a softer pace with a score of 42.9.

Commercial which has held up in recent months saw its decline fall faster than August with 46.4.

The index added: “A lack of new project starts was again the main factor holding back construction output. September data indicated that order books deteriorated for the ninth month in a row, albeit only marginally and at the slowest pace over this period.”

S&P’s economics director Tim Moore said: “Business activity expectations for the year ahead were among the lowest since the end of 2022, suggesting that construction companies remained cautious about the near-term outlook and have yet to see a turning point on the horizon.”

National head of construction at restructuring specialist RSM Kelly Boorman said the figures for housing remained an ongoing concern: “Given this is typically the busiest quarter for housebuilders, this reflects the ongoing fragility in the housing sector, fuelled by speculation around property tax changes in the autumn Budget and broader market uncertainty.”

And Brian Smith, head of cost management at Aecom, added: “Activity is still falling, and with inflationary pressures biting, contractors will need to see some shifts in the market to lift new orders as we head into the winter months. It’s essential that the recovery in housebuilding materialises sooner rather than later.”

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