• Prior 44.6

The downturn in the UK construction sector continues but moderated slightly in March. It’s not a good look with all three subsectors (commercial building, residential building, civil engineering) still in decline. Adding to that is a steep decline in employment levels, so that’s something to be wary about. S&P Global notes that:

“March data highlighted a challenging month for UK construction companies as sharply reduced order volumes continued to weigh on overall workloads.

“Civil engineering experienced the biggest setback as activity decreased to the greatest extent since October 2020. Survey respondents commented on subdued sales pipelines and a subsequent lack of infrastructure work to replace completed projects.

“Commercial work also saw a headwind from delayed decision-making on major projects, largely due to worries about the impact of rising global economic uncertainty. The downturn in residential construction activity nonetheless eased since February, providing a source of encouragement despite ongoing reports of sluggish demand conditions.

“Construction companies remained cautious about their year ahead growth prospects, as fewer sales conversions and a third successive monthly reduction in total new work hit confidence levels. Overall business optimism slipped to its lowest since October 2023. “A lack of new projects, alongside pressure on margins from rising payroll costs, led to hiring freezes and the non-replacement of departing staff in March. The net result was the fastest pace of job shedding across the construction sector for nearly four-and-a-half years.”

This article was written by Justin Low at www.forexlive.com.