Construction sector output decreased for the fourth consecutive month amid \u201cheightened business uncertainty\u201d in April, according to newly released data.<\/p>\n
The latest S&P Global UK Construction Purchasing Managers\u2019 Index (PMI) data, released on Wednesday (7 May), showed an activity index of 46.6.<\/p>\n
This was up slightly from the March figure of 46.4 but still below the neutral 50 mark.<\/p>\n
Civil engineering was the \u201cweakest-performing\u201d area of the construction sector last month with a reading of 43.1, according to S&P.<\/p>\n
This was due to \u201ca sharp rate of decline amid a lack of new work to replace completed projects\u201d, it said.<\/p>\n
While housing activity also remained in decline, it \u201cshowed a degree of resilience\u201d with an activity index of 47.1 \u2013 its highest reading so far this year.<\/p>\n
The pace of decline in commercial work was the worst since May 2020, though, with an index reading of 45.5 in April.<\/p>\n
\u201cConstruction companies widely noted that heightened business uncertainty and worries about the broader UK economic outlook had weighed on client demand,\u201d S&P said.<\/p>\n
Lower workloads resulted in the fastest decline in purchasing activity for nearly five years in April, it noted, while average costs rose despite weaker demand conditions.<\/p>\n
A \u201cwide range of items\u201d had risen in price, such as concrete, insulation and timber products. \u201cMany firms reported that suppliers had also sought to pass on rising payroll costs,\u201d S&P noted.<\/p>\n
After the March PMI data showed that construction firms had shed jobs at the fastest rate since October 2020<\/a>, employment levels in April sunk again, although the rate of decline \u201ceased slightly\u201d.<\/p>\n S&P added: \u201cSubdued demand and rising pay pressures were cited as reasons for the non-replacement of voluntary leavers.\u201d<\/p>\n The continued decline in activity contrasts with a more optimistic outlook.<\/p>\n S&P said that 41 per cent of construction firms in its survey panel forecast a rise in output over the next 12 months \u2013 and only 18 per cent predicted a decrease.<\/p>\n \u201cThis signalled a slight improvement in business optimism to its highest since December 2024,\u201d S&P said.<\/p>\n \u201cA number of firms commented on positive expectations for residential building work, despite ongoing domestic economic headwinds and fragile client confidence.\u201d<\/p>\n Analysts reacted with pessimism to the latest PMI data.<\/p>\n Construction firms \u201care feeling the burden\u201d from \u201cstagnant demand\u201d and increases since April to employer national insurance contributions and the national minimum wage<\/a>, said Lauren Pamma, head of energy and infrastructure at Aldermore Bank.<\/p>\n \u201cWe\u2019re beginning to see the fallout from the ongoing cross-border tariff war<\/a> which will no doubt disrupt supply chains and impact prices further moving forwards,\u201d she added.<\/p>\n \u201cThe outlook still remains unclear, and with developments emerging every day, SMEs will be monitoring the geopolitical landscape closely to see how the construction sector will be impacted.\u201d<\/p>\n Atul Kariya, head of construction and real estate at MHA, said the latest data gave \u201clittle reason for celebration\u201d.<\/p>\n