PMI shows the most significant drop in production for the last 5 years

Data from the latest monthly survey of construction purchasing managers and the PMI analysis indicate a sharp and accelerated decline in production volumes within the construction sector. This is happening against a backdrop of widespread reports about difficult market conditions. But what are the reasons for this situation, and how will it affect the construction industry in the future?

The main source: PMI: Steepest downturn in output for five-and-a-half years

The reason for that situation

The S&P Global UK Construction Purchasing Managers’ Index (PMI) stood at 39.4 points in November, down from 44.1 points in October, marking the lowest level since May 2020. Construction output has been declining for 11 consecutive months.

Subsector data showed that residential construction (index 35.4), commercial construction (43.8), and civil engineering (30.0) experienced the fastest decline in activity in five and a half years. Survey respondents highlighted unstable market confidence, delays in starting new projects, and a general lack of fresh work.

Around 44% of respondents also reported a fall in new orders, while only 17% signaled growth. Excluding the pandemic period, the seasonally adjusted new orders index indicated the fastest drop in new work since early 2009.

Construction companies commented on sales obstacles caused by clients’ unwillingness to take risks, concerns about the UK’s economic outlook, and increased business uncertainty ahead of the budget announcement.

How will the PMI influence the UK Building industry?

In the short term, this situation will have negative consequences, as it adds uncertainty to an already unstable UK construction market.

Brian Smith, head of cost management at Aecom, said:
“This is another month of declining activity, continuing a trend that began at the start of 2025. Firms can be forgiven for a lack of festive cheer, but the Government has done what it can by protecting capital spending and supporting planning reform. However, clients need to see further progress before committing to new projects.”

Fencyx, as one of the leaders in the UK building industry, hopes that all necessary actions will be taken and that the situation will begin to improve.

Read also: Welsh Government determines its construction strategy