Skip to content
LatestIT consultant ordered to pay £50,000 after being accused of stealing Soho House members’ personal details
CityAM Canada

Canadian business, markets & economy · Wednesday, 12 August 2026

  • Business
  • Markets
  • Economy
  • Technology
  • Politics
  • Energy
  • Property
  • Opinion
Tuesday 06 February 2024 10:00 am

Hopes of lower interest rates fuels optimism in the construction sector

By: Chris Dorrell

Add as a preferred source on Google
The sector has been hit hard by rising interest rates, which have sent a chill through the housing market and depressed new construction projects.
The sector has been hit hard by rising interest rates, which have sent a chill through the housing market and depressed new construction projects.

UK construction companies have said they’re increasingly hopeful that the downturn which has hit the sector over the past year or so is coming to an end.

According to S&P’s construction purchasing managers’ index (PMI), optimism among construction companies reached its highest level in two years.

The sector has been hit hard by rising interest rates, which have sent a chill through the housing market and depressed new construction projects. However, it is all but certain that interest rates have reached a peak with policymakers at the Bank of England suggesting rate cuts are a “when” rather than an “if”.

This has sparked confidence that the sector could rebound in 2024. Just over half of surveyed firms forecast a rise in business activity in the year ahead compared to just 12 per cent predicting a decline.

“Lower borrowing costs and higher consumer confidence were cited as factors likely to boost construction activity over the course of 2024.,” the report noted.

“UK construction companies seem increasingly optimistic that the worst could be behind them soon as recession risks fade and interest rate cuts appear close on the horizon,” Tim Moore, Economics Director at S&P Global Market Intelligence said.

“There were again signs that customer demand is close to turning a corner as total new orders fell to the smallest extent for six months,” Moore continued.

Read more

Construction sector cuts jobs again as house building slumps

Rachel Reeves at construction site, inspecting housebuilding progress, highlighting Labours commitment to housing developm...

The improvement in confidence came despite another slight downturn in output in January and a marginal fall in new work.

The headline PMI reading came in at 48.8 in January, up from 46.8 in December but below the 50 no-change mark for the fifth consecutive month.

The downturn was steepest among house buildings, with the sector specific PMI coming in at 44.2.

Although this put house-building deep in negative territory, it was still the lowest rate of contraction since March 2023. Civil engineering and commercial property both recorded slight falls in January but edged closer to the 50 no-change mark.

Higher confidence among construction firms did not translate into hiring activity, with employment numbers falling fractionally in January.

The survey also showed that firms were dealing with the highest rate of input cost inflation since May 2023. “Some firms commented on higher prices paid for imported items, especially those that had incurred additional shipping costs,” the report noted.

Read more

High interest rates and low confidence put construction firms under pressure, Lords warns

Construction worker on a roof of a new build house, surrounded by scaffolding and building materials.

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • Markets & Economics

Categories

  • Economics

Related Topics

  • Construction industry
  • Purchasing Managers' Index (PMI)

Trending Articles

  • Five-star Mayfair hotel hit with HMRC winding-up petition

  • Nottingham Forest owner Marinakis sues Crystal Palace for defamation

  • Back to basics: Sainsbury’s gradual retreat from the British high street

  • Hargreaves Lansdown orders staff back to office

  • As it happened: Intel, Arm shares slide; Oil climbs higher

More from CityAM

  • Construction sector cuts jobs again as house building slumps

    Industrials
    Rachel Reeves at construction site, inspecting housebuilding progress, highlighting Labours commitment to housing developm...
  • High interest rates and low confidence put construction firms under pressure, Lords warns

    Property
    Construction worker on a roof of a new build house, surrounded by scaffolding and building materials.
  • Iran war woes cause jump in London-listed profit warnings

    Economics
    GettyImages 2211256637 showing a significant event or figure relevant to recent news updates in the business sector
  • Balfour Beatty ups profit forecasts as it defies construction gloom

    Transport & Infrastructure
    Balfour Beatty construction site showcasing cranes, workers, and building progress against a city skyline backdrop
  • Titan Group: First Half 2026 Results

    Business Wire
  • Rightmove: Housebuilders face worst conditions since financial crisis

    Property
    Numerous For Sale and To Let signs from various real estate agents outside a brick building.
  • Housebuilders urge Rayner to ‘hit the ground running’ and rip up planning red tape

    Property
    Angela Rayner, Deputy Leader of the Labour Party, smiling in glasses at an event with camera crew and lighting
  • House prices slump as Iran war and interest rates hit demand

    Property
    The price paid for first homes has surged 7.1 per cent in a year
CityAM Canada

Independent Canadian business, markets and economic journalism, published by CityAM Publishing in Toronto. Read our editorial standards and corrections policy.

CityAM Publishing, 3 Borden Street #301, Toronto, Ontario M5S 2M8, Canada.
Newsroom enquiries: contact the editorial desk.

Follow

LinkedInXRSSApple News

Sections

BusinessMarketsEconomyTechnologyPoliticsEnergyPropertyOpinion

Newsroom

About usEditorial standardsCorrectionsOur journalistsContact

Company

AdvertisePrivacy noticeTerms of useCookie preferences

© 2026 CityAM Publishing. All rights reserved.

PrivacyTermsCookiesContact

Nothing published on CityAM Canada constitutes investment advice or a recommendation to buy or sell any security. CityAM Canada is an independent Canadian edition and is not affiliated with any UK publication.