Construction sector growth falters

City A.M. Reporter
Growth in the country's construction sector slowed markedly in August led by a loss of momentum in residential construction, according to a survey.

The Markit/Chartered Institute of Purchasing and Supply construction PMI slipped to 52.1 in August from 54.1 in July. That was below the consensus forecast of 53.2 and more than six points below peaks scaled in May.

Nonetheless, it was still the sixth consecutive reading above the 50-level which separates growth from contraction.

Official data last month showed British construction output jumped 8.5 per cent between April and June, its best showing since 1982, but the more forward-looking PMI survey suggest this pace of growth will not be repeated.

Employment within the UK construction sector decreased during August for a second consecutive month.

"Those who are looking for signs of a slowdown will find plenty to worry about in this month's construction PMI," said CIPS chief executive David Noble.

"The most disturbing is the marked slowdown in the residential sector as this is where much of the recent sector growth has come from. The slight increase in public sector activity disguises continuing uncertainty about the scale of spending cuts which we have yet to experience."