‘Renewed Slowdown’ in August for the UK Construction Industry

Uncertainty around Brexit the most commonly sited reason.

According to a closely watched index of activity the UK Construction Sector showed signs of a ‘renewed slowdown’  in August.  The construction industry purchasing managers’ index (PMI) dropped to 52.9 in August from a 14 month high of 55.8 in July and behind economists predictions of 55.0.  Any number above 50 indicates growth.

UK builders are optimistic they will grow their business over the coming 12 months but the degree of confidence at its weakest since May.

Civil engineering was the worst performing sector due to a lack of progress on infrastructure projects the amount of work decreased for the first time in five months.  Housebuilding also slowed down but commercial construction registered the best performance. Due to a poor performance earlier in the year, caused by poor weather in the spring the construction industry did bounce back in July, but the latest data shows this temporary boost has ended.

August data showed a renewed slowdown in output growth across the UK construction sector with all three categories of activity recording a loss of momentum since the previous month IHS Market said.  There are signs of resilience in terms of underlying workloads with the latest survey signalling another solid upturn in new business.

Duncan Brock, Group Director at the Chartered Institute of Procurement and Supply said “Cracks in the construction sector’s masonry were beginning to show again this month and the housebuilding sub-sector were hit hardest as it reported the poorest performance since March this year.  Civil Engineering saw a drop off in larger infrastructure projects and found itself in contradiction territory”.

“Levels of new work held moderately steady overall, but with any significant growth held back by Brexit uncertainty”.

It was also the logjams in supply routes that hampered work in hand where material and skill shortages meant vendor performance deteriorated to its worst level since March 2015.

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