The UK’s construction industry is facing its longest slump since the COVID-19 pandemic.
Building a house is becoming harder as fewer projects are starting and construction work slows down.
Many builders are reporting tough conditions, with rising costs and fewer new orders making it difficult to keep up with demand.
This slowdown puts the government’s plan to build 1.5 million new homes by 2029 at serious risk.
Homebuilding sector decline deepens
The homebuilding sector experienced its sharpest decline since February, with the housing sub-sector PMI dropping to 44.2.
Civil engineering also saw a significant reduction, recording its lowest level since October 2020 at 38.1. These declines are primarily attributed to a lack of new projects and increased competition among firms.
Gareth Belsham, director of Bloom Building Consultancy, commented: "Things have gone from bad to worse for housebuilders, with residential construction output falling at its fastest rate since February."
Skills shortage threatens housing goals
The UK's housing ambitions face an additional hurdle: a significant shortage of skilled workers.
Sara Roberts, Chief Operating Officer at Kingdom Academy, emphasised the need for investment in skills development to address the workforce shortage.
"With 140,000 more construction workers needed for the next five years to achieve the government's Warm Homes Plan, and another 61,000 each year to meet the target of 1.5 million new homes, considerable investment is needed to tackle skills shortages and deliver these targets," she stated.
Outlook remains uncertain
Despite some positive signals on the supply side, such as shortened delivery times and eased purchasing price inflation, the overall outlook for the construction sector remains bleak.
Business confidence has weakened, with only 34% of firms expecting growth in the coming year, the lowest level since December 2022.
Tim Moore, economics director at S&P Global Market Intelligence, noted: "Construction activity has decreased throughout the year to date, the longest continuous downturn since early 2020."
The government's target of delivering 1.5 million new homes by 2029 is increasingly at risk, if this target hasn't already been abandoned, as the construction sector continues to face significant challenges.
Without substantial intervention to stimulate activity and address workforce shortages, the goal remains uncertain.
