(Alliance News) - The downturn in the UK construction sector eased slightly at the end of 2023, survey data showed on Friday.

The S&P Global UK construction purchasing managers' index rose to 46.8 points in December from 45.5 in November. It was below the 50-point mark for the fourth month in a row, indicating a reduction in activity but at a slower pace than the previous month.

December's reading was above FXStreet-cited market consensus of 46.0.

The decline construction work was led by housebuilding, with the sub-index languishing at 41.1 points. However, this was the highest reading since July. The decline in civil engineering also eased, with a sub-index of 47.0. However, the commercial construction contraction worsened, but remained only slight negative at 47.6.

Total new work fell at the slowest pace since August, S&P said. Survey respondents cited "subdued customer demand" across housebuilding as a leading factor in reduced order books.

However, the softer decline in new orders and more hopeful outlook for demand helped to increase employment numbers, albeit at a marginal rate.

S&P Global Market Intelligence economics director Tim Moore commented: "Elevated borrowing costs and a subsequent slump in market confidence were the main factors leading to falling sales volumes across the construction sector in the second half of 2023. Survey respondents also continued to cite worries about the broader UK economic outlook, especially in relation to prospects for commercial construction.

"However, expectations of falling interest rates during the months ahead appear to have supported confidence levels among construction companies."

The survey features a panel of around 150 construction firms in the UK. Responses were collected between December 6 and 21.

By Elizabeth Winter, Alliance News deputy news editor

Comments and questions to newsroom@alliancenews.com

Copyright 2024 Alliance News Ltd. All Rights Reserved