Construction firms cut jobs at fastest rate since 2020 despite signs of recovery
However, business in the sector also recorded the sharp rate of job cutting since August 2020 in the face of continued cost pressures.
The latest S&P Global construction purchasing managers' index (PMI) showed a reading of 47.9 last month, improving from 46.6 in April.
It was ahead of the 47.2 reading predicted by economists.
Any reading above the 50 threshold indicates that activity in the industry is increasing while anything below means it is shrinking.
The latest figure meant the sector shrank further but saw its rate of decline slow down compared with the previous month.
Tim Moore, economics director at S&P Global Market Intelligence, said: 'The construction sector continued to adjust to weaker order books in May, which led to sustained reductions in output, staff hiring and purchasing.
'However, the worst phase of spending cutbacks may have passed as total new work fell at a much slower pace than the near five-year record in February.
'Housing activity was the weakest-performing segment in May as demand remained constrained by elevated borrowing costs and subdued confidence.'
Business in housebuilding reported a reading of 45.1 for the month as subdued demand caused the downturn in the sector to accelerate last month.
Civil engineering also reported a significant decline, with a reading of 45.9, while the commercial construction sector declined marginally, recovering to its strongest level since January.
Across the sector, surveyed companies said they were reluctant to backfill job vacancies because of a lack of new work and also increased payroll costs, linked to increases in national insurance contributions and the minimum wages.
As a result, the sector reported the fastest rate of 'job shedding' since August 2020, while subcontractor usage also dropped to a five-year-low.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
3 hours ago
- Reuters
Wall Street's 'hopium' high not exhausted yet
ORLANDO, Florida, June 5 (Reuters) - By any measure, the recent resilience of U.S. stocks is remarkable, with Wall Street powering through numerous headwinds to erase all its tariff-fueled losses and move into positive territory for the year. And although these headwinds haven't gone away, the rally may still have some juice left in it. Since the April 7 lows plumbed after U.S. President Donald Trump's 'Liberation Day' tariff debacle, the S&P 500 and Nasdaq are up 23% and 32%, respectively. 'Big Tech' has led the way, with the Roundhill 'Magnificent Seven' ETF gaining more than 35%. On the face of it, this is remarkable given that many of the concerns that sparked the crash – elevated U.S. import tariffs, tensions between the world's two largest economies, and chaotic and unorthodox policy out of Washington – remain in place today. Equity bulls are essentially betting that many things will go right in the coming months: the Federal Reserve will cut rates; no economic downturn; inflation won't spike despite the tariffs; U.S. tech companies will continue generating strong results; fiscal concerns in Washington will moderate; and perhaps most importantly, Trump will continue to back down on his most aggressive tariff threats – or to use the acronym de jour, investors are assuming the 'TACO' (Trump Always Chickens Out) trade will hold. That's a lot of stars aligning. Some of the biggest names in finance are skeptical, particularly regarding the U.S. fiscal outlook. Bridgewater founder Ray Dalio and JP Morgan CEO Jamie Dimon, both long-time deficit hawks, this week repeated their warnings that the U.S. debt is unsustainable. But these calls have fallen on deaf ears, or equity investors simply think any fiscal fallout will take years to materialize. On the one hand, investors – especially the retail crowd believed to be driving this rally – appear to be overly optimistic. But looked at another way, U.S. equity investors may not be ignoring today's underlying risks, but simply viewing them less apocalyptically than they did a few months ago. Indeed, the overwhelmingly negative sentiment from earlier this year paved the way for the recent rebound. Sentiment among institutional investors reached extreme levels of bearishness in the wake of 'Liberation Day', and recession fears ballooned to historically high levels as well, Bank of America's April fund manager survey showed. Meanwhile, May's survey showed fund managers holding the biggest underweight position in U.S. equities in two years. When sentiment and positioning are that stretched, it doesn't take much for prices to snap back in the opposite direction. If the latest American Association of Individual Investors (AAII) Sentiment Survey is any guide, the snap back in equities still has room to run. Pessimism over the short-term outlook for U.S. stocks increased to an "unusually high" 41.9% last week, above its historical average of 31.0% for the 26th time in 28 weeks. As HSBC's multi-asset strategy team noted this week, it is precisely because these sentiment and positioning indicators are being kept "thoroughly in check" that market dips now are short-lived. It's also good to remember that even though Wall Street has erased its early losses and valuations are rising back towards their recent highs, U.S. stocks are still laggards this year. The S&P 500 is up only 1.5% in 2025 thus far, while the MSCI All Country World Index has jumped around 6%, hitting an all-time high on Wednesday. This suggests there may be room for U.S. outperformance on a relative basis in the coming weeks and months, though, of course, relative value metrics might still favor non-U.S. markets. This doesn't mean we should expect capital to start flooding back into the U.S. again. International institutional investors may continue to rethink their allocation to U.S. assets, creating a long-term risk to U.S. stocks. But for now, domestic U.S. investors are picking up the slack. (The opinions expressed here are those of the author, a columnist for Reuters)
Reuters
4 hours ago
- Reuters
Instant view: US payrolls growth slows in May, unemployment rate steady
NEW YORK, June 5 (Reuters) - U.S. job growth slowed in May, while the unemployment rate held steady, potentially giving the Federal Reserve a buffer to delay the resumption of interest rate cuts. Nonfarm payrolls increased by 139,000 jobs last month after rising by a downwardly revised 147,000 in April, the Labor Department said on Friday. Economists polled by Reuters had forecast 130,000 jobs added last month after a previously reported 177,000 advance in April. The unemployment rate held steady at 4.2% and matched expectations. MARKET REACTION: STOCKS: S&P 500 E-minis added to gains and were up 51 points, or 0.86% BONDS: The yield on benchmark U.S. 10-year notes rose 7.3 basis points to 4.468%, the two-year note yield climbed 7.3 basis points to 3.997% FOREX: The dollar index extended gains a loss and was up 0.47% to 99.14, while the euro was down 0.39% at $1.1399 COMMENTS: "The report itself is a positive report overall, in line with expectations, with the employment number a little bit stronger than expected. It shows the labor market is still intact." "There's one blemish there that stands out. The household-based employment number that's used in the calculation of the unemployment rate was down sharply. There was a big increase in both the household-based employment number and in the supply of Labor in April. We just reversed both by a large amount in such a way that the unemployment rate remains steady. We were afraid it would be going higher and the fact that it held steady is an encouraging sign." "The market is taking the jobs report as a sign the economy is still holding up well. It's not that we're powering ahead. Its moderate growth but there's little sign we're losing momentum from the jobs report mid-way through the second quarter." 'If you look at the trend, it looks like job growth actually bottomed mid/late next year, so the trend looks to be higher. As interesting as today's numbers were, the more interesting data were yesterday's – the unit labor costs and productivity. Productivity was lower and labor costs higher. That ultimately translates into higher inflation. "As long as job growth holds up, the employment data is positive. The other piece of this, in my mind, if you already have had more job openings than candidates, does it make sense to post another job? We cannot find qualified people, I keep hearing. The bottom line, is that the Fed is likely to stay on hold.' ART HOGAN, CHIEF MARKET STRATEGIST AT B RILEY WEALTH "Things are slowing, but they're not collapsing and that's the good news. We're not seeing a serious degradation of the jobs market." 'The sell-off (in Treasuries) really reflects this idea that growth sentiment is heading in a bullish direction. We have yet another month of hard data resilience. There is positive progress on tariffs moderating, even if there's nothing final yet. And a lot of the doomsday scenarios people thought were always one month away - it just seems to be a less likelihood that it's coming. "There's relief, or bearish for bonds, that there are no signs of significant deterioration that people were expecting.' BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN "The rise in payrolls was better than expected, but the previous months were revised significantly lower, taking some sheen off this report. The diffusion index for manufacturing was abysmally low, showing that payroll gains are concentrated while losses are widespread. On its face, this shows an economy that's holding up under the weight of a trade war, but the details show plenty of cracks forming." 'Payrolls came in a little higher than consensus and more than I was looking for, but basically with the exception of hourly wages, the report really doesn't indicate that the Fed would be ready to do anything to help out the labor market. 'In fact, the rise in hourly wages by 0.4% - I don't want to say significant, but it's noticeable. And so that you know just means that the Fed stays on hold and the labor market, although there are definitely signs that it's cooling and obviously that's attributed to the trade war because many people are not hiring due to the uncertainties. 'Bottom line, it's a report that's not going to move the markets very much and I would, I would classify this as a mediocre report.' JAMIE COX MANAGING PARTNER, HARRIS FINANCIAL GROUP, RICHMOND VIRGINIA "The labor market is strong, but cooling. I expect this report, with all its revisions to bring the Fed back into cutting mode in July. Wages are stable, for now, but that is likely to change in the coming months. "One of the biggest factors with labor is housing - the housing market is showing early signs of trouble, and a cooling labor market will make that worse."
Daily Mirror
4 hours ago
- Daily Mirror
Gloating email from M&S hackers to CEO confirms motives behind cyber attack
A email has come to light sent to the boss of Marks & Spencer from a now notorious gang of online hackers called DragonForce, who are also believed to be behind an attack on the Co-op A gloating email from a gang of cyber hackers to Marks & Spencer has emerged. The message - to M&S boss Stuart Machin - confirms for the first time that retailer had been targeted by the ransomware group. In it, they wrote: 'We have marched the ways from China all the way to the UK and have mercilessly raped your company and encrypted all the servers." It then says "The dragon wants to speak" before giving a link to the darknet - - a hidden part of the internet. The email, seen by the BBC, was sent on April 23 from the hacker group called DragonForce. The gang apparently used the account of an employee from the Indian IT giant Tata Consultancy Services, which has provided IT services to M&S for over a decade. M&S has been left reeling by the cyber attack, which has seen its online clothing, homewares and beauty sales for more than six weeks. The retailer has already estimated it could wipe £300million off its annual profits. Online has become an increasingly important to M&S - as for other retailers - and had more than 10 million 'active' customers and over £1.3billion a year of sales. Join Money Saving Club's specialist topics According to the BBC, the email is in broken English and includes a racist term. It was sent to Mr Machin and seven other executives. As well as bragging about infecting M&S's IT systems with ransomware, they also claim to have stolen the private data of millions of customers. A link in the email connects to a portal on the so-called darknet for DragonForce, the ransomware used in the attack. The hackers wrote: 'let's get the party started. Message us, we will make this fast and easy for us.' The message also appears to suggest the crooks may have details about M&S's cyber insurance policy, saying 'we know we can both help each other handsomely : ))'. M&S has said insurance should reduce the overall £300million hit. M&S has refused to say if the company has paid a ransom to the hackers. M&S is among a wave of companies struck by ransomware - a form of malicious software designed to burrow into companies' systems, steal commercially sensitive information, which is then locked, with crooks demanding their victims pay money before handing them the key. The Co-op and Harrods have also been hit recently. The gang has previously claimed the Co-op narrowly avoided being locked out of its own computer systems. On May 21, M&S said it hoped to resume online sales 'within weeks'. It also warned its operations could be out of action until as late as July, though it expected to begin resuming orders sooner than that. The gang known as DragonForce has been implicated in the first two of those, but speculation is rife about who -or what -it is. While it seems to have first emerged up to two years, experts say they use operate in a similar way to others that specialise in creating ransomware Another gang known as Scattered Spider -with members said to be aged as young as 16 -is said to have used DragonForce's ransomware in the M&S attack. DragonForce's rumoured link to Russia has been fuelled by the fact that a number of other ransomware attacks have been launched from the country in the past. Other reports have linked DragonForce to a pro-Palestinian group located in Malaysia. There has also been speculation about the group's motives, and that they could be political in some way.
