Monday 4 February 2019 9:37 am

UK construction activity slows to weakest growth in 10 months as Brexit ‘anxiety’ harms the sector


Reporter at City A.M. covering banking, markets and insurance

Reporter at City A.M. covering banking, markets and insurance

Follow Callum

The UK construction sector eased to its slowest growth for ten months in January as the industry lost momentum.

Output in commercial, residential  and civil engineering construction fell from December and employment growth slowed to a two and a half year low, according to the IHS Markit / CIPS UK construction Purchasing Managers' Index.

Construction PMI fell to 50.6 in January, from 52.8 in December, the slowest expansion since the 'Beast from the East' led to a decline in March.


Commercial work was the weakest performer, with data indicating a decline in work on commercial projects for the first time in ten months.

IHS Markit said "Brexit-related anxiety" and concerns over the UK's economic outlook continued to weigh on client demand.

New business growth eased to an eight month low, with firms blaming a "wait and see approach" by clients.

Caution also extended to employment, with businesses reporting the slowest rise in jobs since July 2016.

Construction firms remained positive, according to the survey, but optimism fell compared with December as Brexit uncertainty continued to be the most cited concern in the industry.

UK construction growth shifted down a gear at the start of 2019, with weaker conditions signalled across all three main categories of activity," IHS Markit economics associate director Tim Moore said.

"Commercial work declined for the first time in ten months as concerns about the domestic economic outlook continued to hold back activity.


"Delays to client decision-making on new projects in response to Brexit uncertainty was cited as a key source of anxiety at the start of 2019," he added.

Chartered Institute of Procurement and Supply (CIPS) director Duncan Brock said: "The biggest shock came in the form of job creation which has managed to suffer the slings and arrows of Brexit highs and lows with solid hiring since the referendum result.

"Employment rose at the slowest rate since July 2016 and with optimism also in short supply, the sector only needs a small nudge to tip it closer to recession."

 

 

 

 

 

 

 

More to follow.

Share


Tags: