UK construction activity declined at the slowest pace in three months in September amid a softer fall in new orders, survey results from S&P Global showed on Monday.
The headline construction Purchasing Managers' Index climbed to 46.2 in September from 45.5 in August. The expected score was 46.1. However, any reading below 50.0 indicates an overall reduction in construction activity.
Civil engineering activity was the weakest performing category in September, and commercial construction logged a faster decline, while the slower reduction in overall construction activity was helped by a weaker contraction in residential building activity.
New orders fell at the slowest pace in nine months amid new business wins related to energy projects. The overall decrease in order books was attributed to subdued demand, elevated business uncertainty, and general hesitancy among clients.
Employment levels also fell for the ninth straight month in September, linked to ongoing hiring freezes and the non-replacement of departing staff in response to fewer workloads.
Supply conditions improved moderately, and constructors witnessed a reduced pressure on vendor capacity. As a result, they also scaled back input buying for the tenth consecutive month.
On the price front, input price inflation remained high in September amid the impact of elevated pay pressures, alongside increased energy, raw material, and transport costs.
Looking ahead, business activity expectations for the next year remained subdued due to concerns about the UK economic outlook, cutbacks to capital expenditure plans, and reports of uncertainty among clients ahead of the Autumn Budget.
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