Britain’s construction sector saw its sharpest decline in more than five years in October, as civil engineering activity slumped to its lowest level since the pandemic. The downturn was driven by weak demand and growing uncertainty ahead of Finance Minister Rachel Reeves’ upcoming budget, according to a survey released on Thursday.
S&P Global’s monthly Purchasing Managers’ Index (PMI) for the construction sector dropped to 44.1 in October from 46.2 in September, marking an extended decline that represents the industry’s longest slump since the global financial crisis. The reading remained well below the 50 threshold separating growth from contraction, and also missed a Reuters poll forecast of 46.7.
Civil engineering output fell to its weakest point since May 2020, when lockdowns brought much of the construction industry to a standstill. The residential building sector also saw a steep slowdown, with its subindex slipping to 43.6, the sharpest drop since February, while commercial activity registered a more modest decline.
“Reduced workloads were again widely attributed to client caution and delayed project decisions, which have slowed the flow of new developments,” said Tim Moore, economics director at S&P Global Market Intelligence. “Muted demand, combined with ongoing political and economic uncertainty, also led to the steepest reduction in purchasing activity since May 2020.”
