UK construction activity was robust in November. The sector PMI rose to 55.2 from 54.3 in October, marking the ninth consecutive month above the neutral 50.0 threshold. Commercial construction led the way, surging to its strongest level in two-and-a-half years (58.1), driven by increased customer demand and tender opportunities. Civil engineering also expanded (55.9), though at a slower pace compared to previous months.

However, house building contracted at the sharpest rate since June (47.9), reflecting the negative impact of high borrowing costs and waning consumer confidence. Supplier performance and input cost pressures worsened, with the steepest rise in costs in 18 months attributed to higher raw material and staffing expenses.

New business growth continued but eased to a five-month low, with political and economic uncertainties, including the Autumn Budget, affecting client confidence. Employment growth also slowed, reflecting higher labour costs, with some companies turning to subcontractors despite rising charges. Additionally, business optimism, while still positive, dipped to its lowest in 13 months, highlighting concerns over the outlook.

Today's update leaves the RPI at minus 11 and the RPI-P at minus 21. This means that economic activity, in general, is still falling somewhat short of market expectations.

The Construction Purchasing Managers' Index (PMI) provides an estimate of business activity in the UK construction sector for the preceding month based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 170 construction companies. The panel is stratified geographically and by Standard Industrial Classification (SIC) group, based on the regional and industry contribution to gross domestic product. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The data are compiled by the Chartered Institute of Purchasing and Supply (CIPS) and S&P Global.

The survey is based on techniques successfully developed in the USA over the last 60 years by the National Association of Purchasing Management. It is designed to provide one of the earliest indicators of significant change in the economy. The data collected are not opinion on what might happen in the future, but hard facts on what is actually happening at 'grass roots' level in the economy. As such the information generated on economic trends pre-dates official government statistics by many months.