UK building progress slows to 6-month low, PMI exhibits

By David Milliken

LONDON (Reuters) – Exercise in Britain’s building trade grew on the slowest tempo in six months in December, dented by an extra fall in house-building, a survey confirmed on Tuesday.

The S&P World Buying Managers’ Index for the development sector dropped to 53.3 in December from November’s 55.2, its lowest since June and under all forecasts in a Reuters ballot of economists.

S&P’s UK all-sector PMI, which incorporates beforehand launched companies and manufacturing PMI information for December, fell to a 13-month low of fifty.6 from 50.9 in November, simply above the 50 mark that divides progress from contraction.

Builders stated they confronted headwinds from excessive rates of interest and fragile shopper confidence.

“Though confidence recovered after a post-Price range hunch throughout November, it was nonetheless a lot weaker than within the first half of 2024. Many companies reported worries about cutbacks to capital spending and gloomy projections for the UK financial system,” S&P economics director Tim Moore stated.

Britain’s financial system misplaced momentum within the second half of 2024, partly due to large-scale tax rises within the new Labour authorities’s first price range on Oct. 30.

Nonetheless, sticky inflation means monetary markets anticipate the Financial institution of England to chop rates of interest by solely half a share level this yr, to 4.25% from 4.75% at the moment.

Property buy taxes will rise for some patrons from April, and employers face an enormous improve in social safety funds which some have stated will result in lowered funding.

Expectations for future building output had been greater than in November however nonetheless their second weakest of 2024.

An increase within the variety of tenders for business building work had not been sufficient to offset a fall in housing tasks and a scarcity of recent infrastructure work, S&P stated.