UK Housebuilders to Face Construction Woes Despite Government Plans to Stimulate Building

UK housebuilders Persimmon and Balfour Beatty will announce half-year results, while Bellway provides a trading update. Despite the Government's plans to stimulate more building, construction woes may cloud the outlook. Experts say the sector is fighting issues outside of its control, including slowing construction activity and mortgage availability concerns. The Labour Government has pledged to build 1.5 million homes this Parliament, but recent survey data shows UK construction work dropping at the fastest rate in over five years.

The UK construction sector continues to grapple with significant challenges, as indicated by recent data showing a sharp decline in activity. According to S&P Global, the UK Construction Purchasing Managers' Index (PMI) fell to 44.3 in July, marking the fastest contraction in over five years [1][2]. This downturn, driven by a sharp drop in residential building and civil engineering projects, raises questions about the government's ability to meet its target of building 1.5 million homes by mid-2029.

The survey highlighted several factors contributing to the decline, including site delays, lower volumes of incoming new business, and weaker customer confidence. Commercial construction and civil engineering also experienced a notable slowdown, with staff numbers falling for the seventh consecutive month. These issues are compounded by a reluctance from customers to commit to contracts and a lack of tender opportunities.

Despite the government's efforts to stimulate more building, the sector faces external pressures. The Labour Government's plans to boost housebuilding are hindered by broader economic conditions and mortgage availability concerns. The latest survey data underscores the severity of the situation, with the construction PMI posting its lowest reading since May 2020.

UK housebuilders Persimmon and Balfour Beatty are set to announce their half-year results, while Bellway will provide a trading update. Investors and financial professionals should closely monitor these announcements, as they will offer insights into the sector's resilience amidst these challenges.

References:
[1] https://www.theguardian.com/business/live/2025/aug/06/openai-valuation-chatgpt-trade-war-trump-switzerland-brazil-construction-uk-eurozone-business-live-news-updates?filterKeyEvents=false&page=with%3Ablock-68934b938f080c47306170f2
[2] https://www.investing.com/news/economic-indicators/uk-construction-activity-falls-by-most-in-five-years-survey-shows-4172140