Construction Sector Takes a Hard Drag: 5‑Month Lull and Big Job Cuts
In May, the construction industry went through its fifth straight month of slowdown, leaving many firms battling a downhill trend.
Job Cuts Hit the Record‑High 2020 Pace
The latest S&P Global Construction PMI sat at 47.9. That reads as a sharp dip, indicating companies are slashing output, hiring, and buying materials because orders aren’t coming in fast enough.
- Last month’s layoffs were the fastest since 2020.
- Many firms are tightening belts as costs keep climbing.
- Construction crews are feeling the pinch daily.
What’s Driving the Decline?
According to Tim Moore, the economics director at S&P Global Market Intelligence, the sector’s – it’s not rocket science, but think of it as parking a large SUV in a tight alley – has been in the “low‑groove” because order books have shrunk. He noted:
- The worst spending reductions may have passed.
- New work fell slower than the near‑five‑year record from February.
A Tale of Two Backdrops: Housing & Confidence
Housing? Not so great. Henry’s “Home Builder” paints a picture where people are on the fence – high borrowing costs and a “meh” vibe keep the demand low.
Hope for a Summer Revival?
Lauren Pamma, Head of Energy & Infrastructure at Aldermore Bank, offers a silver lining: Though output dipped, the amount of slowdown is the smallest since January. Commercial contracts and new work are bouncing back.
She says:
- Interest rate cuts last month gave a boost.
- There’s a growing optimism that summer could bring a surge in activity.
- In 2025, growth expectations are at the highest point yet.
Big Uncertainty (and Big Tariffs)
The backdrop isn’t all sunshine. With the US 90‑day tariff pause nearing its end and inflation hitting a one‑year high, developers are on tenterhooks.
- The US might double steel and aluminium tariffs from 25% to 50%. That’s a major headache for construction firms.
- The UK may still need to seal a trade deal with the US to keep those high tariffs off the table.
- If business confidence stays sluggish, projects may keep getting postponed.
SMEs are keeping a close eye on the geopolitical vibes it’s a bit like watching a season finale – the plot twists are in the next few days.
What Does This Mean for the Everyday Construction Worker?
For the on‑site crews and project managers, it’s a time of tightening budgets, seeking flexibility, and staying ready for any directional changes. While the industry may forecast a bounce-back, the reality remains a bit of a roller‑coaster ride.
Stay in Tune – Tune Out the Noise
Keep your eyes peeled for the latest updates – the construction sector plays a crucial role in the economy, and while predictors give a read, the real story unfolds in the field.
