Latest news with #CIPSUKConstructionPurchasingManagers'Index
Zawya
04-04-2025
- Business
- Zawya
UK construction sector tumbles, costs pressure and job cuts intensify, PMI shows
LONDON - Britain's construction industry shrank sharply last month, with civil engineering declining at the fastest rate since 2020 due to weak orders and a lack of new infrastructure work, according to a survey published on Friday that showed optimism plunged. There was also concern among firms about the impact of the increase in social security contributions paid by employers, the weak outlook for the economy, and geopolitical uncertainty. The S&P Global/CIPS UK Construction Purchasing Managers' Index stood at 46.4 in March up from 44.6 in February and slightly above economists' average expectation of 46.0 in a Reuters poll. Still, the index remained rooted below the 50 dividing line for growth and contraction. "March data highlighted a challenging month for UK construction companies as sharply reduced order volumes continued to weigh on overall workloads," Tim Moore, economics director at S&P Global Market Intelligence, said. "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." Total new orders declined for the third month in a row, although at a slower rate than in February with firms citing weak demand and market conditions. The survey showed just 40% of construction firms expected to see output to rise in the coming 12 months - the weakest in 17 months. Civil engineering contracted at the sharpest rate since October 2020, during the Covid-19 pandemic, and commercial building fell at the fastest pace since January 2021. But house-building shrank less sharply than in February when it hit a 57-month low. Construction firms reported the fastest pace of job shedding in nearly four and half years, attributed to higher payroll costs and business confidence slipped to its lowest since October 2023. The all-sector PMI, which combines the services, manufacturing and construction industries, rose to its highest since October last year at 51.0 in March from 50.0 in February, thanks to a strong performance from the services industry.
Reuters
04-04-2025
- Business
- Reuters
UK construction sector tumbles, costs pressure and job cuts intensify, PMI shows
LONDON, April 4 (Reuters) - Britain's construction industry shrank sharply last month, with civil engineering declining at the fastest rate since 2020 due to weak orders and a lack of new infrastructure work, according to a survey published on Friday that showed optimism plunged. There was also concern among firms about the impact of the increase in social security contributions paid by employers, the weak outlook for the economy, and geopolitical uncertainty. The S&P Global/CIPS UK Construction Purchasing Managers' Index stood at 46.4 in March up from 44.6 in February and slightly above economists' average expectation of 46.0 in a Reuters poll. Still, the index remained rooted below the 50 dividing line for growth and contraction. "March data highlighted a challenging month for UK construction companies as sharply reduced order volumes continued to weigh on overall workloads," Tim Moore, economics director at S&P Global Market Intelligence, said. "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." Total new orders declined for the third month in a row, although at a slower rate than in February with firms citing weak demand and market conditions. The survey showed just 40% of construction firms expected to see output to rise in the coming 12 months - the weakest in 17 months. Civil engineering contracted at the sharpest rate since October 2020, during the Covid-19 pandemic, and commercial building fell at the fastest pace since January 2021. But house-building shrank less sharply than in February when it hit a 57-month low. Construction firms reported the fastest pace of job shedding in nearly four and half years, attributed to higher payroll costs and business confidence slipped to its lowest since October 2023. The all-sector PMI, which combines the services, manufacturing and construction industries, rose to its highest since October last year at 51.0 in March from 50.0 in February, thanks to a strong performance from the services industry.
Reuters
06-03-2025
- Business
- Reuters
Sterling extends drop versus euro after German fiscal boost
LONDON, March 6 (Reuters) - The pound extended a slide against the euro on Thursday, dropping to its weakest level since January as the single currency benefited from an improving growth outlook after Germany announced plans to massively boost fiscal spending. Sterling was last at 83.85 pence per euro , down about 0.2% on the day. It's dropped about 1.5% this week, and is on course for its biggest one-week fall since January 2023. "It's all to do with the broad-based euro optimism that we've seen with this shift in fiscal policy in Germany," said Kirstine Kundby-Nielsen, FX analyst at Danske Bank. On Tuesday, the parties looking to form the next government of Germany, Europe's largest and the world's third largest economy, agreed to loosen fiscal rules and create a 500 billion euro special fund to boost infrastructure. That sent the euro surging against major peers and pushed bond yields higher on expectations for more borrowing. Major investment banks have been quick to lift their growth forecasts for Germany and the euro zone bloc, while some now expect fewer interest rate cuts from the European Central Bank. The ECB announces policy later on Thursday and is widely expected to lower its deposit rate by 25 basis points, the sixth reduction in the easing cycle. Bank of England rate setters, meanwhile, are generally sticking to their "careful" approach to interest rate cuts, having lowered borrowing costs for the third time since August last month. Against the dollar, the pound was down 0.1% , having earlier risen to its highest in four months at $1.2924. Britain's construction sector contracted sharply last month, a survey showed on Thursday. The preliminary reading of the S&P Global/CIPS UK Construction Purchasing Managers' Index fell to 44.6 last month from January's 48.1, its weakest level since May 2020. "Rocketing uncertainty around global trade policy, rising materials prices, and the looming payrolls tax hike in April all conspired to further sap confidence," said Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics. The all-sector PMI, which combines services, manufacturing and construction, fell to a 16-month low of 50, down from 50.3 in January.
Reuters
06-03-2025
- Business
- Reuters
UK construction PMI falls to lowest since 2020 as house-building plummets
LONDON, March 6 (Reuters) - Britain's construction sector contracted sharply in February, with residential house-building declining at one the fastest rates since 2009 due to weak demand and high borrowing costs, according to a survey published on Thursday. The preliminary reading of the S&P Global/CIPS UK Construction Purchasing Managers' Index fell to 44.6 last month from January's 48.1, its weakest level since May 2020 and below all forecasts in a Reuters poll of economists. The all-sector PMI, which combines the services, manufacturing and construction sectors, fell to a 16-month low of 50.0 in February from 50.3 in January. The construction PMI's gauge of housebuilding tumbled to 39.3 from 44.9 in January, one of the sharpest downturns on record, excluding the global financial crisis and the start of the COVID-19 pandemic. "Sharply declining order books rippled through the UK construction sector in February, which led to accelerated reductions in output volumes, employment and input buying," Tim Moore, economics director at S&P Global Market Intelligence, said. "Weak demand conditions were attributed to entrenched caution among clients, against a backdrop of subdued consumer confidence and lacklustre economic performance" he added Total new orders declined by the most since May 2020, with firms citing cutbacks to investment and concerns about economic growth. The pace of job-shedding accelerated last month, with the employment index at its lowest since November 2020. Moore said there were signs that a hike in payroll costs, due to come into force in April, was having an impact. Recent business surveys have shown declining business optimism and similar concerns about investment, hiring and demand due to measures announced in finance minister Rachel Reeves' October budget. Other sectors measured by the PMI fell, too. Civil engineering activity was at its weakest in more than four years, while commercial work fell marginally. Input costs increased by the most in almost two years as suppliers sought to pass on higher raw material, energy, fuel and wage costs. The all-sector PMI, which combines the services, manufacturing and construction sectors, fell to a 16-month low of 50.0 in February from 50.3 in January.
Reuters
06-02-2025
- Business
- Reuters
UK construction activity tumbles in January, hit by housebuilding, PMI shows
LONDON, Feb 6 (Reuters) - Activity among British construction firms shrank sharply in January, marking the first contraction in almost a year, according to a survey published on Thursday that also showed cost pressures escalating. The S&P Global/CIPS UK Construction Purchasing Managers' Index fell to 48.1 last month from December's 53.3, coming in below all forecasts in a Reuters poll of economists. Tim Moore, economics director at S&P Global Market Intelligence, said a gloomier economic outlook, high borrowing costs and weak confidence had led to a reduction in new work. The Bank of England is expected to cut interest rates later on Thursday after holding them at 4.75% in December. But its room for further reductions is limited with inflation pressures still strong. S&P Global's gauge of housebuilding fell to 44.9 from 47.6 in December, the fastest rate of contraction in a year. Companies attributed the decline in part to weaker demand. Prime Minister Keir Starmer government's is trying to speed up the building of homes. "Anecdotal evidence suggested that caution regarding demand for new projects was prevalent at the start of 2025, despite strong policy support for house building and hopes for a longer-term boost to supply via planning reform," Moore said. Other sectors measured by the PMI fell, too. Civil engineering activity contracted for the first time in 11 months and had its weakest month since November 2023 with a subindex reading of 44.6, due in part to wet weather. The commercial sub-sector declined for the first time since March last year. Job creation fell marginally, signalling the first shrinkage in staffing in five months. Input costs increased by the most since April 2023 as suppliers sought to pass on rising energy, fuel and wage costs While business confidence tumbled, some survey respondents thought major infrastructure spending and green energy projects were likely to boost output levels in the coming 12 months. The all-sector PMI, which combines the services, manufacturing and construction industries, fell to 50.3 in January from 50.6 in December.
