Nervous contractors stall construction activity
news23rd March 2018
The construction industry struggles to progress in 2018, the latest monthly construction purchasers survey indicates.
Recent data shows continued subdued growth across the construction sector in the UK. New work decreased for the second consecutive month, while total business activity increased slightly.
It’s thought that ongoing political uncertainty along with fragile business confidence are holding back client demand, while material prices, fuel bills and staff continue to push up operating expenses.
The seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) showed a slight increase at 51.4 in February, up from the four month low in January of 50.2. Although any score over 50 is an indicator of growth, the average score in 2017 was 52.3.
The worst performing category in construction in February was civil engineering where activity fell at the fastest pace for five months, while residential work stayed on track for its weakest quarter since Q3 2016.
However, there was some positivity, with an upturn in commercial construction which expanded at the quickest rate since May 2017.
Tim Moore, associate director at IHS Markit and author of the IHS Markit/CIPS Construction PMI, said: “The construction sector endured another difficult month during February, with fragile business confidence, entrenched political uncertainty and softer housing market conditions all factors keeping growth in the slow lane.
"Residential work appears on track to experience its weakest quarter since Q3 2016, suggesting that house building is losing its status as the main engine of construction growth.
“The increase in work on commercial projects during February was one of the strongest seen over the past two years. Some construction firms noted that greater industrial demand, alongside structural changes in consumer spending habits, had contributed to new project opportunities.
“Despite pockets of resilience in the UK construction sector, there was little sign of an imminent turnaround in overall growth momentum. Reflecting this, total volumes of new work dropped for the second month running in February and business optimism was among the weakest recorded by the survey since 2013.”
Written by Ian Johnson
