UK Construction Growth At 6-month Low
UK construction growth was the weakest in six months in September, defying expectations for an improvement, as all three sub-sectors lost momentum.
The CIPS UK construction purchasing managers’ index fell to 52.1 from 52.9 in August, survey data from IHS Markit showed on Tuesday. In contrast, economists had expected the index to rise to 53.1.
A PMI reading above 50 suggests growth in activity.
Several firms blamed the subdued economic conditions so far this year for holding back business activity growth.
Civil engineering was the worst performing sub-sector. Activity growth slowed in house building and commercial construction.
New work and employment grew robustly, but business optimism was at the second-lowest level since February 2013.
Political uncertainty and investor concerns about Brexit had dampened confidence in September, the survey said. Forthcoming energy and transport projects were the main areas of optimism.
New order growth was the strongest since December 2016, largely due to resilient demand and an upturn in new invitations to tender.
Employment grew robustly, at the fastest pace since December 2015, thanks to solid new order growth. A tight labor market conditions also played a part in framing long-term hiring policies.
Costs grew sharply at the fastest rate in three months due to strong demand for inputs amid higher fuel prices and greater raw material prices.
«This tale of feast and famine offers little in the way of reassurance and is more about holding on to stable growth than a sprint to the finish, Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, said.
«The weakest overall activity in six months shows that caution and Brexit concern remain roadblocks to strong growth.»