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Construction firms shed more staff amid concerns over economy

07 Apr 2025 2 minute read
Construction workers

Construction firms cut jobs at the fastest rate for four years last month as the sector’s downturn in activity continued, according to new figures.

It came as the commercial construction sector declined at its sharpest rate since the start of 2021, amid concerns over the UK economy and global uncertainty.

The latest S&P Global construction purchasing managers’ index (PMI) showed a reading of 46.4 in March, improving from the 57-month low of 44.6 it posted in February.

It was marginally below the 46.6 reading predicted by economists.

Any reading above the 50 threshold indicates that activity in the industry is increasing while anything below means it is shrinking.

It means the UK’s construction sector shrank in March – for the third consecutive month – but at a slower rate than in February.

Weak outlook

But the fresh data still pointed towards a weak outlook for the industry.

Surveyed firms were the most pessimistic about their business prospects for 18 months on the back of “elevated interest rates and worries about the broader economic outlook”.

The data showed that commercial construction remained a stronger part of the sector but still contracted further, with its latest decline marking its weakest monthly reading for more than four years.

“Lower business activity was linked to lacklustre UK economic prospects and the impact of rising geopolitical uncertainty on clients’ investment spending,” the survey found.

Meanwhile, construction order books reduced again on the back of sluggish demand across the market.

Job shedding

The survey also reported a reduction in staffing numbers for a third consecutive month, as the rate of job shedding accelerated to its fastest since October 2020.

Tim Moore, economics director at S&P Global Market Intelligence, said: “March data highlighted a challenging month for UK construction companies as sharply reduced order volumes continued to weigh on overall workloads.

“Civil engineering experienced the biggest setback as activity decreased to the greatest extent since October 2020.

“Survey respondents commented on subdued sales pipelines and a subsequent lack of infrastructure work to replace completed projects.”


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