Overview

• 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.