Sunday 31 July 2016 3:57 pm

Building suppliers to provide health check for UK construction


I write about energy and industrials for City A.M. I'm particularly interested in geopolitics, energy policy and, of course, the ever lively oil markets.

I write about energy and industrials for City A.M. I'm particularly interested in geopolitics, energy policy and, of course, the ever lively oil markets.

Two building materials suppliers' results next week will shed light on the outlook for the UK construction industry.

Builders across the country rely on the likes of Travis Perkins and Ibstock for their bricks, cements and roofing materials — meaning their results act as a litmus test for the wider sector’s health.

Read more: This company just proved bricks can float


Alarm bells rang after data firm Markit’s purchasing managers’ index for the construction industry fell to its lowest level in seven years in June, coming in at 46 from 51.2 a month earlier. Scores below 50 mark contraction.

Investment bank UBS expects Travis Perkins’ full-year profits to fall four per cent to £427m when it reports on Tuesday. Ibstock will report three days later.

Broker Panmure & Gordon recently cut Travis' Perkins full-year profit before tax forecast by 7.7 per cent, saying that the dire PMI data points to a near-term downturn in the sector.

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