UK construction industry growing at slowest rate for three years, according to purchasing managers' index

 
Jake Cordell
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The hiring of construction workers slowed in March 2016 according to Markit/CIPS purchasing managers' index. (Source: Getty)

The construction industry is expanding at its slowest pace since 2013, according to the closely-watched Markit/CIPS purchasing managers' index (PMI) out this morning.

The survey, which measures business activity across the construction sector, came in at 54.2 for March - on an index where a score above 50 indicates expansion - though Markit said this was sluggish compared to the last few years.

"The UK construction sector is experiencing its weakest growth phase since the summer of 2013," said Tim Moore, senior economist at Markit.

Read more: KPMG says housebuilding will fall if Britain leaves the EU

"Heightened uncertainty about the business outlook appears to have weighed on overall construction demand so far in 2016, with survey respondents citing cautious client spending patterns and a reduced willingness to commit to new projects," he added.

Order books grew slower than in recent months, with the rate at which companies are winning new projects falling to an 11-month low, according to the survey. Construction firms were also hiring at a slower pace than before and continued to cut back on using sub-contractors.

"The government will be particularly disappointed to see housebuilding growth almost ground to a halt in March when it was at its weakest level since January 2013 - given that it is looking to address the UK’s acute housing shortage," said Howard Archer, chief UK and European economist at IHS Global.

Despite the gloomy headlines, only 11 per cent of construction companies actually said they expected their own activity to fall back over the next 12 months, while more than half (51 per cent) think business will continue to pick up in the year ahead.

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