The construction sector has suffered the worst month in three years in October, despite falling costs.
In October, the S&P Global/CIPS construction purchasing managers’ index (PMI) scored 45.6 and any score below 50 shows a contraction in the sector.
Companies are not getting enough new projects and that confidence remains “fragile” the survey shows.
“October data highlighted another solid reduction in UK construction output as elevated borrowing costs and a wait-and-see approach to new projects weighed on activity,” said Tim Moore, economics director at S&P Global Market Intelligence.
“House building decreased for the eleventh month running and once again saw a much steeper downturn than other parts of the construction sector.
“There were signs of stabilisation in the commercial building segment, however, with output falling only slightly since September.
“Total new work continued to fall more quickly than at any time since the initial pandemic lockdown period, which contributed to shrinking demand for construction products and materials during October.”
Dr John Glen, chief economist at the Chartered Institute of Procurement & Supply (CIPS), said: “High interest rates and low consumer demand for new homes continue to drag down the UK construction sector, with a lack of new tender opportunities and a cutback of existing projects being reported across the house building industry.”