{"id":149280,"date":"2025-03-06T14:05:05","date_gmt":"2025-03-06T14:05:05","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=149280"},"modified":"2025-03-07T08:23:32","modified_gmt":"2025-03-07T08:23:32","slug":"february-2025-pmis-show-sharp-decline-activity","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/february-2025-pmis-show-sharp-decline-activity\/149280\/","title":{"rendered":"February 2025 PMIs show sharp decline in activity"},"content":{"rendered":"

The PMI dropped from January\u2019s 48.1<\/a> down to 44.6 in February<\/h2>\n

The February 2025 PMIs<\/a> show struggles in residential construction, with its sharpest drop since 2009, down to 39.3.<\/p>\n

Civil engineering also saw a large drop, hitting the lowest point since October 2020 at 39.5.<\/p>\n

New orders and input buying took hits in February 2025 PMIs<\/h3>\n

Residential construction has declined for the fifth consecutive month, attributed to weak demand and high costs of borrowing, as well as a drop in new projects.<\/p>\n

Civil engineering cited project cutbacks and a lack of investment into new infrastructure as causes for decline.<\/p>\n

A rapid decline was felt in new orders and input buying with the quickest drop since May 2020. Decisions by clients were delayed thanks to budget constraints and economic uncertainty, and cuts to business investment spending.<\/p>\n

Workforce reductions also hit for the sharpest drop since November 2020, mostly because of firms managing costs, workers leaving voluntarily, and not being replaced. Subcontractor demand also fell to its lowest since May 2020.<\/p>\n

Input costs have also grown at the sharpest rate in just under two years, with 38% of firms reporting higher costs and only 3% seeing reductions. Increases were caused by rising raw material, energy, transportation, and wage costs.<\/p>\n

\u201cInvestment in infrastructure and commitment to increasing housebuilding targets will benefit the industry\u201d<\/h3>\n

Lauren Pamma, head of energy & infrastructure at Aldermore Bank, said: \u201cWe\u2019ve seen industry output decline again in February, with all three categories of construction work \u2013 residential, civil engineering and commercial construction \u2013 seeing weaker activity performances. With higher inflation figures reported last month, businesses are struggling to cover rising costs of supplies, and rising energy, fuel and wage costs continue to hamper growth.<\/p>\n

\u201cThe Government\u2019s investment in infrastructure and commitment to increasing housebuilding targets will benefit the industry, but the ongoing uncertainty around cross-border tariffs could disrupt supply chains moving forwards and impact the sector and knock growth prospects more widely. We know from our research that nearly seven in 10 (68%) construction SMEs have experienced supply chain delays over the last 12 months, and this figure may well increase in the wake of further tariffs being imposed. The outlook is currently unclear, and SMEs will be monitoring the geopolitical landscape to see what the full impact on the construction sector will be.\u201d<\/p>\n

Brian Berry, chief executive of the FMB, said: \u201cToday\u2019s figures only confirm the alarming trend which builders across the UK have been experiencing for months. We\u2019re seeing construction output falling at its fastest rate in almost five years, at the heart of the pandemic, and with input cost inflation also rising fast, already fragile market confidence is likely to take yet another hit. This echoes the FMB\u2019s\u00a0State of Trade Survey for Q4 2024<\/a> which found workloads, enquiries and employment numbers were all down, and that materials costs are rising fast.<\/p>\n

\u201cWith New Work down sharply, particularly in the house building segment, the Government needs to take urgent action to reassure builders and consumers if they are serious about meeting their targets. Urgent steps are needed to diversify the housing market, and give SME builders the opportunity to step up and build the homes on the smaller sites which the major volume housebuilders can\u2019t reach. We need to see greater resource given to local authority planning departments to support the small builders who stand ready to deliver the homes we need.”<\/p>\n

Michael O’Shea, construction partner at international law firm, Gowling WLG, said: “Following the construction sector’s consistent rising output over 2024, we have now seen a second consecutive month of decline with less order books and increased cost pressures being the cause. Recent economic uncertainty will have only added to the fall in activity with threats of tariffs from the US and a potential global trade war.<\/p>\n

“But the Government’s Plan for Change offers some hope on the horizon, with the proposed Planning and Infrastructure Bill, that is expected to be introduced later this month, providing the powers to accelerate the construction of new infrastructure and homes to deliver on the Government\u2019s ambitions. Further reforms have come with an updated National Planning Policy Framework to help accelerate the delivery of Labour\u2019s 370,000 new homes per year target.<\/p>\n

“The next month will prove crucial in terms of offering greater certainty on the economy and which direction the construction sector will take moving forward.”<\/p>\n

Neil Morey, technical director at Thomas & Adamson, said: \u201cConstruction PMI continuing to fall in February isn\u2019t a surprise, but the worsening picture will be a concern \u2013 particularly the steep declines in housebuilding and infrastructure, which are key investment priorities for the government.<\/p>\n

\u201cInflation intensifying once again, an uncertain economic backdrop, and the high cost of finance are taking their toll on the industry. Against the backdrop of falling demand input prices continue to rise, and questions remain over how much of these costs can be absorbed without being passed on to employers in the current market.<\/p>\n

\u201cThat said, it is encouraging to see resilience in commercial construction and we are certainly seeing more projects get off the ground in this sector \u2013 specifically in refurbishments and reuse of existing building stock. And, more generally, we have seen a strong pipeline of projects emerging throughout the year across various sectors during the first couple of months of 2025.<\/p>\n

\u201cThe short-term picture remains challenging, but longer term there are still reasons to retain optimism. Nearly 40% of survey respondents still expect a rise in output during the year ahead, compared to 17% forecasting a decline. With the Budget and the government\u2019s spending plans not too far away, there could well be some much-needed stimulus on the horizon in the not-too-distant future.\u201d<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

S&P Global’s February 2025 PMIs show further declines in the first quarter of 2025, with very little growth in any category.<\/p>\n","protected":false},"author":32,"featured_media":149283,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[304],"tags":[908,974],"stakeholder_rel_tag":[],"contributor_rel_tag":[],"class_list":{"0":"post-149280","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-planning-construction-news","8":"tag-economy","9":"tag-pmi"},"acf":[],"yoast_head":"\nFebruary 2025 PMIs show sharp decline in activity<\/title>\n<meta name=\"description\" content=\"S&P Global's February 2025 PMIs show further declines in the first quarter of 2025, with very little growth 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