UK DATA: Construction PMI falls, details terrible; Budget uncertainty the driver

UK construction PMI data was pretty awful, falling 5 points below consensus to 39.4, but new orders falling off ahead of the Budget can explain much of the move. It might therefore see a bit of a rebound next month but the details are not great.

From the press release:

• "Many construction companies commented on weak client confidence, alongside delayed spending decisions linked to uncertainty ahead of the Budget."
• "Total new business decreased at a rapid pace in November. Around 44% of the survey panel reported a fall in new orders, while only 17% signalled an increase. Aside from the pandemic, the resulting seasonally adjusted New Orders Index pointed to the fastest downturn in new work since early-2009."
• "Employment numbers across the construction sector decreased for the eleventh consecutive month in November, reflecting a lack of new work to replace completed projects and elevated wage pressures. The latest fall in staffing levels was the steepest since August 2020."
• "Looking ahead, the proportion of construction companies expecting an upturn in business activity in the next 12 months (31%) narrowly exceeded those forecasting a decline (25%). The resulting Future Activity Index signalled the lowest degree of optimism since December 2022. Some firms commented on hopes of a rebound in general market conditions and support from lower borrowing costs. However, this was offset by signs of cutbacks to clients' investment spending plans and concerns about long-term domestic economic prospects.