The "chill" of the UK construction industry is coming! PMI plunges to a five-year low, sounding the alarm for recession.

A highly anticipated survey showed that output from UK construction companies has suffered the most severe decline in five years. The UK construction Purchasing Managers' Index (PMI) for July fell from 48.8 in June to 44.3, the lowest level since May 2020, when the industry was first hit by the initial impact of the COVID-19 lockdown. This data falls far below economists' expectations of stability and well below the 50-mark separating growth from contraction. Companies attributed the decline in activity last month to factors such as weak growth in new business, reduced workloads on public projects, construction delays on site, and lack of consumer confidence. Construction activity in the UK fell sharply last month. These survey results will concern the UK Labour government, which has pledged to significantly increase housing construction and invest heavily in public infrastructure. The Labour government has also promised to build 1.5 million homes in five years to address the contradiction between housing supply shortages and high demand, although progress has been slow so far. Joe Hayes, Chief Economist for S&P Global Market Intelligence, said, "The forward-looking indicators in this survey suggest that UK builders are preparing for a difficult period ahead. Companies report that there are limited bidding opportunities and clients are reluctant to take on projects." The S&P housing construction index experienced a significant drop after a growth in June, and the civil engineering index also contracted. Indicators tracking commercial activities showed slight improvement but still indicated declining output. The survey found that the rate of new project commencements by construction companies saw the largest drop since February. The procurement of construction materials has been declining for the eighth consecutive month, and there has been a decrease in employment numbers, attributed to companies cutting staff, freezing hiring, and not filling vacant positions.