THE Federation of Master Builders (FMB) has called for ‘urgent action’ to address the slump in UK construction output following the release of the S&P Global/CIPS UK Construction PMI data for February 2025, which shows the fastest downturn since the start of the pandemic.
Brian Berry, chief executive of the FMB, said the figures confirm the ‘alarming trend’ builders have been experiencing for months.
“We’re seeing construction output falling at its fastest rate in almost five years, at the heart of the pandemic, and with input cost inflation also rising fast, already fragile market confidence is likely to take yet another hit,” he added. “This echoes the FMB’s State of Trade Survey for Q4 2024 which found workloads, enquiries and employment numbers were all down, and that materials costs are rising fast.
“With new work down sharply, particularly in the housebuilding segment, the government needs to take urgent action to reassure builders and consumers if they are serious about meeting their targets.”
Neil Morey, technical director at Thomas & Adamson, part of Egis Group, said that construction PMI continuing to fall ‘isn’t a surprise’, but the worsening picture will be a concern – particularly the steep declines in housebuilding and infrastructure.
“Inflation intensifying once again, an uncertain economic backdrop, and the high cost of finance are taking their toll on the industry,” he said. “Against the backdrop of falling demand input prices continue to rise, and questions remain over how much of these costs can be absorbed without being passed on to employers in the current market.
“That said, it is encouraging to see resilience in commercial construction and we are certainly seeing more projects get off the ground in this sector – specifically in refurbishments and reuse of existing building stock. And, more generally, we have seen a strong pipeline of projects emerging throughout the year across various sectors during the first couple of months of 2025.
“The short-term picture remains challenging, but longer term there are still reasons to retain optimism. Nearly 40% of survey respondents still expect a rise in output during the year ahead, compared to 17% forecasting a decline. With the Budget and the government’s spending plans not too far away, there could well be some much-needed stimulus on the horizon in the not-too-distant future.”
Atul Kariya, head of construction and real estate at accounting and advisory firm MHA, which has offices in Edinburgh and Aberdeen, said the construction sector continues to face global headwinds and multiple cost pressures.
“The industry has battled through in a post-Brexit, post-pandemic environment; however, the high corporation tax rate in comparison to other markets and the increase in employment taxes are not a great recipe for creating long-term economic growth or stimulating investment into construction.”
