UK construction output falls at fastest rate in six years

London (ANTARA) - The UK construction sector recorded a sharp decline in business activity in May, with the rate of contraction being the fastest in six years, according to data from S&P Global released on Thursday (4/6).

According to S&P Global, the seasonally adjusted purchasing managers’ index (PMI) for the UK construction sector stood at 38.2 in May, down from 39.7 in April, and remained below the neutral threshold of 50.0 for the 17th consecutive month.

S&P Global noted that this rate of contraction is the sharpest since May 2020. Excluding the decline in construction output at the beginning of the pandemic, this recent downturn is the fastest since March 2009.

Tim Moore, economic director at S&P Global Market Intelligence, stated that economic uncertainty and rising inflation due to conflicts in the Middle East have triggered the sharpest decline in new orders since the start of the pandemic. Additionally, high borrowing costs were reported to be impacting market conditions.

Fuel surcharges and the rapid rise in energy-intensive raw material prices continue to be felt across the construction supply chain. This has caused overall input prices to increase at the fastest rate since June 2022, he added.

Meanwhile, optimism regarding the outlook for business activity over the next 12 months has weakened to its second-lowest level since December 2022, the company stated, noting that generally weak business confidence is linked to concerns regarding rising inflation, high borrowing costs, and the less encouraging prospects of the domestic economic condition in the short term.