UK construction PMI falls to record low in April - IHS Markit/CIPS

According to the report from IHS Markit/CIPS, April data indicated by far the fastest decline in UK construction output since the survey began 23 years ago. The vast majority of survey respondents (86%) reported a reduction in business activity since March, reflecting widespread site closures and shutdowns across the supply chain in response to the public health emergency.

The headline seasonally adjusted UK Construction Total Activity Index fell from 39.3 in March to 8.2 in April, to signal a rapid downturn in overall construction output. Moreover, the latest reading was the lowest since data were first collected in April 1997. The previous record low was 27.8 in February 2009.

All three main categories of construction work experienced a survey record fall during April, with declines in house building (7.3) and commercial activity (7.7) exceeding that for civil engineering (14.6).

Lower volumes of construction output were almost exclusively attributed to business closures in April, with survey respondents often commenting on complete stoppages of activity on site due to the coronavirus disease 2019 (COVID-19) pandemic.

April data also highlighted a severe impact on construction supply chains, with closures at builders merchants and stoppages of manufacturing production leading to widespread supply shortages.

Business expectations for the year ahead dropped slightly since March and equalled the survey-record low seen in October 2008. Construction firms widely noted concerns beyond simply reopening sites, including cash flow difficulties across the supply chain, rising costs and severely reduced productivity