UK Construction Sector Contracts Sharply in January, Driven by Housing Decline

The S&P Global PMI fell to 48.1, marking the first contraction in nearly a year as economic uncertainty and rising costs weigh on activity.

The UK construction PMI dropped from 53.3 in December to 48.1 in January, signaling contraction for the first time in 11 months.
Housebuilding activity saw its steepest decline in a year, with the subindex falling to 44.9, reflecting weak demand and cautious investment decisions.
Rising input costs, driven by energy, fuel, and wage inflation, intensified pressures on the sector, with price increases at their fastest pace since April 2023.
Civil and commercial engineering projects also contracted, with wet weather and client reluctance to commit to new projects cited as contributing factors.
While business confidence fell, some experts anticipate a rebound later in the year, supported by potential interest rate cuts, planning reforms, and infrastructure spending.