Commercial construction activity showed its strongest growth in two and a half years, with the PMI data pointing to a solid expansion in overall UK construction output. 

Conversely, housebuilding remained the weakest-performing sector. This marked a second consecutive month of contraction, highlighting elevated borrowing costs and fragile consumer confidence as ongoing barriers to demand. Such factors have continued to weigh heavily on residential construction, despite political promises aimed at addressing housing shortages.

One such promise came from Labour leader and UK prime minister Sir Keir Starmer, who in October pledged to get Britain building again. His ambitious plan includes delivering one and a half million new homes across the country within five years of a Labour government � a vision that faces significant challenges against the backdrop of current market conditions.

The data further reveals that new business volumes rose for the tenth consecutive month, albeit at their slowest pace since June. Survey respondents attributed the slowdown in new orders to political and economic uncertainty surrounding the Autumn Budget. However, growth in the commercial sector persisted, driven by opportunities linked to improving customer demand and tendering activity.

Employment within the sector rose only marginally, with job creation slowing to a three-month low according to the PMI data. Construction firms pointed to rising employment costs as a significant factor curtailing new hires. Many companies increased reliance on sub-contractors, with November marking the first rise in sub-contractor usage since July.

The findings underscore a mixed picture for the UK construction industry. Although commercial construction remains strong, the residential sector continues to face challenges, making Labour’s goal of building 1.5 million houses in the next five years seem increasingly unattainable.

Tim Moore, economics director at S&P Global Market Intelligence, said, “The construction sector bucked the slowdown seen elsewhere across the UK economy in November, according to the latest S&P Global PMI survey. Total industry activity once again expanded at a robust pace and there has been a clear acceleration in growth compared to that seen in the first half of 2024.

“However, the recovery in construction activity remains somewhat lopsided. Strengthening demand for commercial work and civil engineering projects contrasted with a sustained downturn in house building. Commercial construction activity expanded at the fastest pace for two-and-a-half years in November, while residential work declined at the steepest rate since June. Elevated borrowing costs and fragile client confidence meanwhile acted as a brake on new order growth in November, with the upturn in sales the slowest for five months.�