UK Construction Sector Sees Sharp Slowdown as Uncertainty Bites
The UK construction sector has witnessed its sharpest slowdown in activity since the first Covid lockdown, with building projects being scaled back and jobs cut amid budget uncertainty. According to a closely watched survey, output in November shrank at the fastest pace since May 2020, when all building stalled due to the pandemic.
The monthly purchasing managers' index (PMI) for construction fell to 39.4 in November, below the forecast of 44.6 by economists and the only reading lower than a contraction. This is the lowest reading since September 2009, when the housing market crashed during the financial crisis.
Residential projects have been particularly affected, with builders scaling back on work over the past year due to a subdued housing market and rising construction costs. Infrastructure and commercial development work also contracted sharply in November, as clients deferred investment decisions amid uncertainty about the autumn budget and concerns about the UK economic outlook.
The Bank of England has reported that businesses in the UK cut jobs at the fastest rate in four years in November, with companies reducing employment by an annual rate of 1.8%. This is the sharpest contraction since July 2021.
However, economists are skeptical of these figures, suggesting that they may have been skewed by "chaotic" speculation before the autumn budget. Robert Wood, chief UK economist at Pantheon Macroeconomics, said: "We find it hard to believe that conditions in the sector are genuinely as bad as during a full lockdown." He noted that construction output has fared better than the PMI survey so far this year.
Matthew Swannell, chief economic adviser to the forecasting group EY Item Club, also questioned the accuracy of the PMI survey. "November's extremely weak PMI should be approached with a healthy degree of scepticism," he said.
The UK government's plans to build 1.5m homes by 2030 have been dealt a significant blow by this slowdown in construction activity. The sector's woes may also have implications for the overall economy, which has already seen rising inflation and a slowdown in growth.
The UK construction sector has witnessed its sharpest slowdown in activity since the first Covid lockdown, with building projects being scaled back and jobs cut amid budget uncertainty. According to a closely watched survey, output in November shrank at the fastest pace since May 2020, when all building stalled due to the pandemic.
The monthly purchasing managers' index (PMI) for construction fell to 39.4 in November, below the forecast of 44.6 by economists and the only reading lower than a contraction. This is the lowest reading since September 2009, when the housing market crashed during the financial crisis.
Residential projects have been particularly affected, with builders scaling back on work over the past year due to a subdued housing market and rising construction costs. Infrastructure and commercial development work also contracted sharply in November, as clients deferred investment decisions amid uncertainty about the autumn budget and concerns about the UK economic outlook.
The Bank of England has reported that businesses in the UK cut jobs at the fastest rate in four years in November, with companies reducing employment by an annual rate of 1.8%. This is the sharpest contraction since July 2021.
However, economists are skeptical of these figures, suggesting that they may have been skewed by "chaotic" speculation before the autumn budget. Robert Wood, chief UK economist at Pantheon Macroeconomics, said: "We find it hard to believe that conditions in the sector are genuinely as bad as during a full lockdown." He noted that construction output has fared better than the PMI survey so far this year.
Matthew Swannell, chief economic adviser to the forecasting group EY Item Club, also questioned the accuracy of the PMI survey. "November's extremely weak PMI should be approached with a healthy degree of scepticism," he said.
The UK government's plans to build 1.5m homes by 2030 have been dealt a significant blow by this slowdown in construction activity. The sector's woes may also have implications for the overall economy, which has already seen rising inflation and a slowdown in growth.
I think these economists need to chill out fam! 
A full lockdown was crazy, but I'm not buying that the sector is worse off now. The whole "chaotic speculation" thing just sounds like an excuse to me. And what's with all this talk about the autumn budget? Can't we have some clarity on our infrastructure plans already?! It's like they're trying to spin the slowdown into something it's not. A 1.8% job cut rate is still a lot, but let's not lose sight of the bigger picture here – what's really driving this construction slump? 
WITH A SHARPLY SLOWED-DOWN IN ACTIVITY THAT'S GOT EVERYONE ON EDGE 
BUILDERS ARE CUTTING JOBS LEFT AND RIGHT 
AND RESIDENTIAL PROJECTS ARE PARTICULARLY HITTING HARD 
IT LOOKS LIKE THE UK GOVERNMENT'S PLANS TO BUILD 1.5M HOMES BY 2030 ARE IN Jeopardy 
Construction sector in the UK is really struggling rn... people are talking about it being worse than during lockdown 
. They're cutting jobs left and right (1.8% annual rate is wild) and it's affecting all sorts of projects - residential, infrastructure, commercial... what's next? 
You can't predict when the market is gonna get all unpredictable and suddenly everyone's losing faith. It's a reminder that even with the best planning, uncertainty can still come knocking on your door. The key here is not to panic but to assess what's happening and adjust accordingly. Maybe it's time for some soul-searching in this industry - what's driving these costs and slowdowns? Are there any changes that need to be made before things start picking up again? 
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. I mean, who knows for sure what's goin' on behind closed doors? The fact that construction output has been better than expected so far this year is a good sign, but it's not enough to completely dismiss the concerns.
I just hope they can get a handle on things soon, 'fore it's too late 
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i'm sure theres some silver lining somewhere... maybe this slowdown means people are gonna be more careful with their spending & investment, like, less impulsive purchases & stuff. plus, 1.5m homes by 2030 is still a pretty ambitious goal, so maybe the gov's just trying to make it more achievable 