UK Construction Costs Hit Record High in March Amid Slumping Demand

The UK construction sector experienced an unprecedented surge in input cost inflation during March, with the PMI input cost index jumping to 70.5 from 59.5 in February. This spike represents the sharpest month-on-month increase in construction costs since records began in 1997, signaling intense inflationary pressures for British firms. The rise is primarily attributed to escalating energy and operating expenses, likely exacerbated by ongoing regional geopolitical tensions impacting global supply chains. Alongside soaring costs, the sector is grappling with a notable decline in demand and a significant drop in new orders. These combined factors raise serious concerns regarding stagflationary pressures within the UK economy. Consequently, this data is expected to weigh heavily on the British Pound and construction-heavy equities in the near term.