UK construction industry experiences slowdown in growth
The UK construction industry saw its weakest performance in nine months according to the latest Markit and the Chartered Institute of Purchasing & Supply (CIPS) UK Construction Purchasing Managers’ Index (PMI) figures.
UK construction’s PMI fell to 55.0, down from December’s figure of 57.8, still well above the growth threshold of 50 but registering the slowest period of growth since April 2015.
As with December’s figures, commercial work was the strongest performing category but still saw the slowest rise since June last year.
Housebuilding also experienced its weakest period of growth in over two and a half years.
The poorest performing sector was again civil engineering, despite displaying a slight increase from December’s eight-month low.
Businesses remained very positive about the prospects for growth over the next 12 months, with 46% of respondents forecasting a rise in activity and only 7% expecting to see a downturn. There was some concern expressed, however, that underlying demand conditions had begun to soften.
Tim Moore, Senior Economist at Markit said: “UK construction firms struggled for momentum at the start of this year, with heightened economic uncertainty acting as a brake on new orders and contributing to one of the weakest rises in output levels since the summer of 2013. Softer growth of house building activity and a more subdued increase in commercial construction were the main factors behind the slowdown.
“Business confidence appears to have subsided across the construction sector, following the multiyear highs seen in 2015. The latest survey indicated that construction companies are less upbeat about their prospects for growth than at any time since December 2014.
“Job creation was sustained in January, but at the weakest pace for almost two-and-a-half years. Greater caution was also evident in terms of input buying at the start of 2016. Taken together with the slowdown in new order growth, the latest survey suggests that construction companies are braced for a relatively subdued first quarter.”
The slowdown in the construction industry was in contrast to the manufacturing industry, which yesterday posted better than expected figures of growth for January.