Proactive Investors - The contraction in the UK construction sector eased in January with UK builders the most optimistic in two years in January, a report showed on Tuesday.
Builders expect lower borrowing costs to boost activity, according to S&P Global.
The S&P Global UK construction purchasing managers’ index rose to 48.8 points in January, up from 46.8 in December and the highest since August 2023.
The reading was higher than the 47.3 forecast by a Reuters-cited consensus.
Tim Moore of S&P Global Market Intelligence said construction companies were “increasingly optimistic that the worst could be behind them soon as recession risks fade and interest rate cuts appear close on the horizon.”
The improvement was in contrast to bleak surveys in Europe where activity in the eurozone's construction sector declined at the fastest rate since May 2020.
The HCOB Eurozone construction PMI total activity index fell from 43.6 points in December to 41.3 in January.
The index was below the neutral 50.0 threshold for twenty-first month in a row and the latest reading was indicative of a decline in activity that was the steepest since May 2020.
The sharpest drop in overall construction activity was once again seen in Germany, where the pace of decline accelerated to the second-strongest since April 2020.
The French construction sector saw activity fall at the strongest pace in three years. Italy recorded a sustained, albeit softer expansion in construction activity.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: "There are limited signs that the construction sector has a chance to get off the ground any time soon."