Construction buyers reported a downturn in industry output in September for the first time in three months as industry activity declined at its fastest pace since May 2020.
All three main segments of construction work posted a reduction in business activity, led by a steep and accelerated fall in house building.
The bellwether S&P Global/CIPS UK Construction Purchasing Managers’ Index registered 45.0 in September, down sharply from 50.8 in August and below the neutral 50.0 value for the first time since June.
Residential work (index at 38.1) was by far the worst-performing area of construction output during September, followed by civil engineering activity (45.7).
Commercial building declined at only a modest pace in September (index at 47.7), but this represented a considerable setback after the solid growth seen throughout the summer.
The number of construction firms predicting a rise in output over the year ahead (41%) continued to exceed those forecasting a decline (17%).
This was linked to long- term business expansion plans and hopes of a turnaround in customer demand.
Tim Moore, Economics Director at S&P Global Market Intelligence, which compiles the survey said: “Output levels declined across the UK construction sector for the first time in three months during September and the latest downturn marked the worst overall performance since the early stages of the pandemic.
“A rapid decline in house building activity acted as a major drag on workloads, with construction companies widely commenting on cutbacks to new residential development projects in the wake of sluggish demand and rising borrowing costs.
“Concerns about the domestic economic outlook also dampened client spending during September, which contributed to the fastest reduction in commercial building since January 2021.
“The survey’s forward-looking measures once again remained relatively downbeat as order books decreased at an accelerated pace and business activity expectations eased to the lowest so far this year. Moreover, fewer project starts meant that subcontractor availability increased to the greatest extent since the summer of 2009.
“Lower demand across the supply chain contributed to a robust improvement in delivery times for construction productions and materials, alongside a stabilisation in purchasing costs during September.”