Construction activity in the UK has dropped sharply, with it being the worst since May 2020. According to a new survey, house building and engineering work slowed down considerably, pushing the S&P Global construction PMI to 44.6 in February, from 48.1 in January.
Housebuilding was the most affected sector, with its activity index standing at 39.3, the worst since the pandemic. The builders also pointed out high interest rates, weak demand, and a lack of new projects as some of the reasons for the decline.
Although the government is keen on building 1.5 million homes, uncertainty over public spending and planning delays have put a damper on construction. However, private housing projects jumped by 31% from November 2024 to January 2025, which could be the beginning of a turnaround.
Official data also showed that housing starts increased by 10.9% in the latter part of 2024, but approvals for new projects are low; only 242,610 homes were approved in 2023, the fewest since 2014. They have to rise by 53% to meet the government’s targets, experts say.
Economists think that demand may pick up with rates falling and confidence among consumers rising, but for now, UK construction activity remains weak.
