Decreasing output in construction was further evidenced in the latest update to the S&P Global/CIPS UK Construction Purchasing Managers’ Index.
The index, which tracks changes in the volume of construction activity through a survey of around 150 construction firms, was 45.6 in October, the second lowest it has been since May 2020.
The respondents were said to be at their least optimistic so far this year, as they reported a decrease in housebuilding activity for the eleventh consecutive month, as well as steeply declining input prices against a backdrop of high interest rates and low consumer demand.
BCIS Chief Economist, Dr David Crosthwaite said: ‘Monthly movement in the BCIS General Building Cost Index, which tracks input costs, has also been downward in the last two months of provisional data we have.
‘Looking specifically at materials costs, as measured by the BCIS Materials Cost Index, these have been showing minimal growth since the start of the year and decreasing on a monthly basis since June.
‘Our latest price adjustment formulae indices show further decreases in materials’ costs. However, we are keeping an eye on price increases in fuel, which will affect project costs as supplies are impacted. The provisional PAFI 4/CE/27 DERV Fuel index has been growing for four consecutive months, registering a monthly increase of 3.9% in September 2023.’
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