A study released on Monday revealed that while the housing market in Britain had its worst month in nearly three years in January as a result of higher borrowing rates, builders are now more optimistic about the forecast for 2023.
The construction sector’s S&P Global/CIPS Purchasing Managers’ Index (PMI) fell to 48.4 from 48.8 in December, marking its lowest point since May 2020.
Due to rising interest rates, Britain’s building industry lost impetus in the second half of 2022. In an effort to combat the spike in inflation, the Bank of England last week increased borrowing prices to 4%, their highest level since 2008.
The poll released on Monday revealed a steep reduction in home construction, as well as a decline in commercial and civil engineering projects.
But after falling to its lowest point since May 2020 in December, the construction PMI’s measure of company expectations rose to its highest level since July last year.
At the beginning of 2023, several businesses noticed audible indications of a recovery in new sales inquiries, according to Tim Moore, economics director at S&P Global Market Intelligence.
Other building companies only observed the broader economic outlook’s slow improvement and anticipated that confidence would reappear later this year, he said.
The new orders gauge was only marginally higher than December’s two and a half year low, but an indicator of input cost inflation was somewhat higher than December’s two-year low.
Construction data from Monday and last week’s manufacturing and services data are included in S&P Global’s all-sector PMI, which fell to 48.5 in January from 49.0 in December, marking its second-lowest score in two years.