Business activity expectations within the construction sector have plummeted to their lowest point since late 2022, as firms maintained a pessimistic outlook ahead of the Autumn Budget.
The most recent Purchasing Managers Index (PMI) from S&P Global revealed that construction output reached a three-month peak of 46.2 – yet remained significantly beneath the crucial 50.0 benchmark that determines whether a sector is expanding, as reported by .
This represented the ninth successive month that construction dropped below this threshold, indicating a "solid rate of contraction".
The report noted that business activity expectations remained "subdued" at the second-weakest level since December 2022, with limited optimism counterbalanced by "concerns about the º£½ÇÊÓƵ economic outlook".
Nevertheless, commercial construction stood as the sole sub-sector to experience a more rapid rate of decline during September.
A shortage of new projects was identified as the primary factor constraining the sector's progress.
Employment figures contracted for the ninth month running.
'Weak business optimism' in construction
Tim Moore, economics director at S&P Global Market Intelligence, commented: "Weak business optimism, shrinking workloads and robust cost pressures once again led to lower employment numbers across the construction sector."
He noted that the latest data indicated the º£½ÇÊÓƵ construction sector was encountering "pressure on multiple fronts as residential, commercial and civil engineering work all continued to decrease at solid rates."
Moore noted that survey participants had expressed wariness ahead of the Autumn Budget, with numerous clients postponing plans until after Rachel Reeves presents her upcoming fiscal announcement.
"A general reluctance to commit to major capital expenditure projects against a subdued domestic economic backdrop" was highlighted by participants.
The findings come after bleak assessments from both the services and manufacturing sectors over the past week.
Within services, business activity growth dropped to a five-month low whilst manufacturing battled to recover despite some modest optimism in recent months.
Disruption stemming from a cyber attack on Jaguar Land Rover created knock-on effects across the broader manufacturing sector, researchers indicated.
Employment also declined for the eleventh straight month owing to pressures from an increased national minimum wage and Rachel Reeves' rise to employers' national insurance contributions (NICs).
