𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Angela Rayner has suffered a major blow as new data suggests the construction industry has contracted when the Government is aiming to build 1.5million new homes. Activity in the UK’s construction sector dropped at the fastest rate in more than five years in July following a fresh housebuilding slump, a new survey showed, as companies reportedly lay off staff. S&P Global said earlier today: “Underlying data highlighted marked decreases in volumes of work carried out across all three monitored sub-sectors, but a considerable drag came from a fresh drop in residential building.”

The firm’s UK Construction Purchasing Managers’ Index (PMI) was pulled down to 44.3 in July, from 48.8 in June. Any number below 50 represents a contraction, and this latest reading suggests there has been the sharpest contraction in more than five years. Gareth Belsham, director of Bloom Building Consultancy, said: “There’s no sugarcoating it – this data will be tough to swallow for almost everyone in construction.

“All three subsectors of the industry saw output contract in July, with the sharpest fall coming in civil engineering. Housebuilding, the sector beloved of politicians in need of a photo opp, also declined badly.

“To make matters worse, the pipeline of new work is drying up fast. New order numbers have now fallen for seven months in a row, with July’s slump the worst seen since February.”

The expert also warned that staff were being let go due to the downturn. Mr Belsham said: “Little wonder contractor confidence is weak and many construction firms are laying off payrolled staff.

“June saw sentiment plunge to its lowest level since December 2022, and while July’s figure improved marginally, even the most optimistic of builders will find it hard to see the glass as half full.”

Tomorrow, the Bank of England will unveil its interest rate decision, and it is expected that officials will cut it.

Mr Belsham said: “Tomorrow the Bank of England is widely expected to cut its base rate for the third time this year, and the prospect of cheaper finance will be welcomed by developers who are struggling to square their finance costs with weak demand for their end product.

“The one bright spot is commercial sector construction. While it too saw output fall in July, at least more commercial schemes are being greenlit. Those that do are laser-focused on value and have a fully costed business case – there is minimal margin for error.”