UK October Construction PMI Hits Lowest in Over Five Years

According to S&P Global data released on the 6th, the UK's construction Purchasing Managers' Index (PMI) fell to 44.1 in October, the lowest since May 2020, with civil engineering projects experiencing a particularly severe decline.

The UK's construction PMI in October fell significantly from 46.2 in September and remained below the neutral line of 50, continuing the downward trend and highlighting an intensified contraction in the industry.

Data from the subdivided sectors show that the sub-index for civil engineering activities has declined significantly due to delayed public project investments and weak private demand. The residential building sub-index is at 43.6, with the contraction rate reaching its fastest pace since February of this year, reflecting the sluggish real estate market. The commercial building sub-index has also slightly decreased, indicating a cautious attitude towards corporate investment.

UK media analysis indicates that the demand side of the UK construction industry is weak, with the total volume of new orders accelerating its decline in October. The wait-and-see sentiment before the announcement of Chancellor Reeves' budget has led to clients avoiding risks, delaying decisions, and slowing the commencement of new projects.

Tim Moore, the Economic Director at S&P Global Market Intelligence, pointed out that customer decision delays combined with uncertainty are suppressing demand, leading the construction industry into a cycle of "insufficient demand - investment contraction." Industry experts believe that the current employment index in the sector has fallen to its lowest level since August 2020, with companies laying off workers to control costs. The industry's downturn reflects the severe challenges facing the UK's economic recovery.