Recent data from the S&P Global UK construction purchasing managers’ index (PMI) revealed an increase to 46.4 in January, surpassing expectations. While this indicates a reduction in the sector’s decline, the overall activity remains below the 50 mark, which separates contraction from growth. Housebuilding, in particular, showed continued weakness compared to other construction areas.
The improvement suggests that the construction sector is stabilizing after a period of downturn, though challenges persist. Other segments within construction have demonstrated more resilience, helping to offset the slower performance in residential building.
**Why this matters**
The construction sector is a key component of the UK economy, influencing employment and investment. A stabilizing PMI signals potential recovery, which could support broader economic growth. However, ongoing weakness in housebuilding may affect housing supply and affordability, highlighting areas where targeted support or policy adjustments might be needed.
Source: NewsData