In May, the construction sector saw its fifth consecutive month of decline, highlighted by job cuts and cost pressures. The S&P Global construction PMI fell to 47.9, indicating reduced output and hiring due to weakened order books. Despite this downturn, experts note that the worst may be behind, as new work declined at a slower rate. Housing activity remains the most affected, largely due to high borrowing costs. However, optimism is growing for a rebound in summer, aided by an interest rate cut and potential protective trade agreements against tariffs.
The construction sector continued to adjust to weaker order books in May, which led to sustained reductions in output, staff hiring and purchasing.
Output may have dipped again this month, but today's data signals the slowest reduction in output volumes since January.
There's growing optimism that activity could rebound over the summer, with output growth expectations across the sector recovering to the highest so far in 2025.
As we edge closer to the end of the 90-day pause on the USA's tariffs - and with inflation at a 12-month high - there is hesitation with many developers.
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