The UK construction sector, after enduring a prolonged period of decline, is finally showing signs of stabilisation as the year draws to a close. December marked the fourth consecutive month of overall industry contraction, but there was a noticeable slowing in the rate of decline. The monthly survey of construction industry purchasing managers reflected this change, with a score of 46.8, slightly better than the previous three months' readings.
Sector Analysis
The three key sectors of the industry—house-building, civil engineering, and commercial construction—all experienced slowed activity in December, with respective scores of 4.1, 47.0, and 47.6. The house-building sector, in particular, faced subdued customer demand, leading to reduced order books. However, the rate of new work decrease was the slowest since the downturn began in August 2023, indicating a possible shift in momentum.
Employment and Supplier Dynamics
December also saw a marginal increase in employment numbers, fuelled by hopes of a turnaround in 2024. Concurrently, a reduced demand for construction products and materials led to shorter wait times for supplier deliveries. This improvement in vendor performance has been ongoing since March 2023, with competition among suppliers driving price discounting. Interestingly, the average cost burdens across the construction sector decreased for the third consecutive month.
Optimism for 2024
Despite the current challenges, there is a sense of optimism within the sector. According to the survey, 41% of respondents expect an increase in business activity in 2024, with only 17% predicting a decline. Factors such as reduced interest rates and a revival in market confidence are cited as potential catalysts for this upturn.
Tim Moore of S&P Global Market Intelligence comments on the situation, noting the impact of elevated borrowing costs and weak market confidence on sales volumes, especially in the second half of 2023. However, he also highlights the growing confidence among construction firms for the coming year.
Fraser Johns of Beard echoes this sentiment, acknowledging the challenges, particularly in the house building sector, but also pointing to positive indicators and high demand in certain regions. He emphasises the importance of resilience and nurturing client relationships as confidence slowly returns.
Role of Find A Start
In these challenging times, platforms like Find A Start play a crucial role in connecting contractors with skilled tradespeople, aiding in the sector's recovery. By facilitating quick and efficient team assembly for various projects, Find A Start supports the industry's resilience and adaptability. Our platform is committed to being part of the solution, helping contractors find the right people and tradespeople to secure consistent work opportunities. To learn more about how we contribute to the construction sector's revival, visit our website at www.findastart.co.uk.
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