UK Construction Growth Slows On Housing Downturn, Weak Demand

RTTNews | 666 days ago
UK Construction Growth Slows On Housing Downturn, Weak Demand

(RTTNews) - The British construction sector expansion slowed in August as the growth in the commercial and civil engineering segments were not strong enough to offset a steep slump in house building and sharply weakening demand due to rising borrowing costs, the purchasing managers' survey results from S&P Global showed on Wednesday.

The Chartered Institute of Procurement & Supply Construction Purchasing Managers' Index, or PMI, dropped to 50.8 in August from 51.7 in July. The score was expected to fall to 50.5.

A reading above 50 suggests growth, while any score below 50 indicates contraction in the sector.

"Though the construction sector overall showed an improvement in August, several imbalances in the figures give cause for concern," CIPS Chief Economist John Glen said.

Among the three main categories of the UK CIPS/S&P Global PMI, the commercial building activity continued to grow strongly in August, and civil engineering output also increased, although the rate of growth was the lowest in four months.

Meanwhile, the house building activity was the weakest performing segment, with the pace of downturn being the second-fastest since May 2020. The negative contribution was attributed to subdued market conditions and a headwind to activity from cutbacks to new build projects.

Total new orders received by British construction companies dropped marginally in August, which was the worst fall since May 2020.

Rising interest rates and concerns about the near-term economic outlook were behind the more cautious spending among clients, especially in the residential building segment, the survey said.

Employment across the sector rose only moderately in July, and the rate of job creation eased since July.

The upturn in sub-contractor usage also softened in August, leading to the sharpest rise in availability since January 2010, the survey said.

Suppliers' delivery times for construction products and materials, meanwhile, improved at a robust pace due to improved stock availability and fewer pressures on supplier capacity.

Input costs in the construction sector stabilized as a result of an improved balance between supply and demand. Input price inflation softened in August amid more competitive market conditions and successful price negotiations with suppliers to account for falling raw material costs.

Construction companies were relatively cautious about the outlook for business activity over the next year amid concerns about the impact of rising borrowing costs and subdued housing market conditions.

read more
UK Service Sector Growth At 10-Month High

UK Service Sector Growth At 10-Month High

The UK service sector posted its fastest growth in ten months in June underpinned by a renewed improvement in order books, final purchasing managers' survey from S&P Global showed on Thursday. The services business activity index climbed to 52.8 in June from 50.9 in the previous month. This was the highest score since August 2024 and above the initial estimate of 51.3.
RTTNews | 16h 55min ago
UK House Price Inflation Softens In June

UK House Price Inflation Softens In June

UK house prices logged a slower growth in June reflecting weaker demand after the increase in stamp duty at the start of April, data from the Nationwide Building Society showed on Tuesday. House prices advanced 2.1 percent year-on-year in June, slower than the 3.5 percent increase seen in May. House price growth was expected to moderate to 3.3 percent.
RTTNews | 2 days ago
UK Mortgage Approvals Rise For First Time This Year

UK Mortgage Approvals Rise For First Time This Year

UK mortgage approvals increased for the first time so far this year in May, suggesting an improvement in housing market activity, figures from the Bank of England showed Monday. The net mortgage approvals for house purchases that indicate future borrowing rose by more-than-expected 2,400 to 63,000 in May. This was the first increase since December 2024.
RTTNews | 3 days ago
UK GDP Growth Confirmed At 0.7%

UK GDP Growth Confirmed At 0.7%

The UK economy expanded at a stronger pace in the first quarter as previously estimated on robust services and industrial production, revised data from the Office for National Statistics showed on Monday. Real gross domestic product grew 0.7 percent, unrevised from the first estimate. This followed 0.1 percent expansion in the fourth quarter and marked the fastest growth since the first quarter.
RTTNews | 3 days ago
BoE's Greene Seeks Cautious Approach On Concerns Over High Inflation, Uncertainty

BoE's Greene Seeks Cautious Approach On Concerns Over High Inflation, Uncertainty

The Bank of England must have a prudent approach to reducing interest rates as the U.K. inflation may remain high for a longer time than expected rather than a short-term spike, and also due to risks on the global front including fluctuations in oil prices in the backdrop of the ongoing Middle East conflict, policymaker Megan Greene said on Tuesday.
RTTNews | 9 days ago
UK Private Sector Grows At Fastest Pace In 3 Months

UK Private Sector Grows At Fastest Pace In 3 Months

The UK private sector output picked up at the strongest pace in three months in June after business volume returned to growth, flash survey results from S&P Global showed on Monday. The flash composite output index registered 50.7 in June, up from 50.3 in May. The reading was above the crucial 50.0 no-change value for the second straight month.
RTTNews | 10 days ago
UK Retail Sales Fall Most Since Late 2023; Consumer Confidence Improves

UK Retail Sales Fall Most Since Late 2023; Consumer Confidence Improves

UK retail sales declined more than expected in May as food store sales declined sharply after good weather boosted sales in April, the Office for National Statistics reported Friday. Retail sales fell 2.7 percent on a monthly basis in May, in contrast to the revised 1.3 percent increase in April. Sales were forecast to drop 0.5 percent.
RTTNews | 13 days ago
Bank Of England Holds Rate Steady On Higher Inflation

Bank Of England Holds Rate Steady On Higher Inflation

The Bank of England maintained interest rates unchanged on Thursday as inflation in the U.K. has remained persistently above the target and geopolitical tensions escalated, raising the upside risks to inflation. The BoE Monetary Policy Committee, led by Governor Andrew Bailey, voted 6-3 to hold the Bank Rate at 4.25 percent. Three members preferred to reduce the rate by 25 basis points.
RTTNews | 14 days ago