Arabnews24.ca:Tuesday 6 December 2022 10:43 AM: Construction activity slowed last month as demand reduced amid higher borrowing costs and worries about the economic outlook.
The announcement comes just hours after the government watered down housing commitments.
Secretary for Housing Michael Gove had watered down the government's target to build 300,000 homes a year following backlash from MPs in his own party, though the reason was not based on economic considerations.
Sixty Conservatives signed an amendment calling for the mandatory house construction target to be scrapped over fears that communities would have to accept unwanted developments.
Tuesday's construction data showed building activity slowed without the intervention of backbench Tory MPs.
Construction growth slipped to a three-month low and business expectations were weakest since May 2020, the S&P Global/CIPS UK construction purchasing managers' index (PMI) figures demonstrated.
The PMI survey serves as a closely watched survey of industry behaviour and sentiment.
It illustrated slowed demand as the appetite for taking risks dimmed among potential construction customers.
Respondents pointed to higher borrowing costs and worries about the economic outlook as reasons why construction activity was curtailed. Optimism was also recorded as being the lowest for two-and-a-half years and, aside from the levels seen at the start of the pandemic, the degree of positive sentiment was the joint-weakest since December 2008.
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However, similar to other forms of inflation, the rate of price increases slowed and cost inflation eased to a 22-month low.
The only section of the industry to register an increase in business activity was commercial construction. Meanwhile house building stalled, ending a three-month period of marginal expansion.
This was exacerbated by higher mortgage rates and falling consumer confidence, which construction companies listed as factors that had held back residential building activity.
Mortgage rates rose in the wake of the September mini-budget as interest rates rose in anticipation of interest rate hikes from the Bank of England. The Bank raised the interest rate in an effort to rein in inflation, which economists feared would spiral in response to the announced tax cuts and spending.
In early September, consumer confidence suffered its biggest fall since the early days of the pandemic as cost of living pressures mounted.
