UK Construction Sector Faces January Setback

In a surprising turn of events, the UK's Construction Purchasing Managers' Index (PMI) dipped to 48.1 in January, marking a significant decrease from December's 53.3. This unexpected decline has pushed the sector into contraction territory for the first time since February 2024, according to a recent report by S&P Global and the Chartered Institute of Purchasing & Supply (CIPS).

Residential Work Leads the Downturn

The slowdown was primarily observed in residential construction, with civil engineering also experiencing a notable decrease. "The UK construction output fell for the first time in nearly a year, driven by gloomy economic prospects, elevated borrowing costs, and weak client confidence," explained Tim Moore, Economics Director at S&P Global Market Intelligence. He further noted, "Construction firms reported the fastest decline in residential work in 12 months, reflecting subdued market conditions."