CONSTRUCTION sector’s rapid expansion slowed in November, new data shows.
The purchasing managers’ index – a survey of private sector firms – dropped from 61.4 to 59.4 in November, according to figures released by Markit yesterday.
The figure is above 50 and so signifies an expansion. However, it is the lowest growth registered for 13 months.
A broad slowdown was seen with output growth slowing across the residential, commercial and civil engineering sectors. New business volumes’ expansion slowed with construction firms reporting strong competition for new work as well as greater uncertainty about the economic outlook that was weighing on client confidence.
However, not all areas suffered a growth dip. Employment remained strong with the number of staff taken on nearing the survey record in July.
“The fundamentals still appear strong in the new build residential market despite the signs of a slowdown in the wider housing market. All the longer term indicators are still pointing upwards I would say,” Michael Dall, chief economist at construction firm Barbour ABI, told City A.M.
Dall believes the National Infrastructure Plan announced yesterday will aid the construction sector’s growth, but is concerned that it focuses too much on the south.
“I was expecting more announcements to boost the northern regions of the economy, perhaps around a Trans-Pennine Rail Link, but this wasn’t in the National Infrastructure Plan today, so I’m not sure whether this will be announced in the statement,” Dall said.