The IHS Markit/CIPS UK Construction PMI, reveals UK construction companies have recorded another growth slowdown in July, reflecting lower volumes of business building plus a softer continuing development of housing activity.
The latest survey also revealed reverse mortgage start up business volumes the very first time since August 2016, which acted for a headwind to job creation and input buying all over the construction sector.
At duration, intense logistics pressures continued in July and prices for construction materials increased at among the list of sharpest rates ever since the first half 2011.
Adjusted for seasonal influences, the IHS Markit/CIPS UK Construction Purchasing Managers’ Index? (PMI?) dropped from 54.8 in June to 51.9 in July, to signal the weakest construction performance since August 2016. The latest reading was in the long-run survey average (54.5) and pointed to merely a reasonable pace of economic activity growth.
Lower quantities of commercial construction were a vital factor holding back overall business activity boost July. Although only modest, the reducing of commercial activity was the fastest for A year. Several survey respondents cited delays in making decisions by clients, connected with worries around the economic outlook and heightened political uncertainty.
Residential building remained the best performing type of activity in July, but the latest rise was the slowest for 3 months. Really the only upturn in output growth was recorded during the civil engineering sector.
Construction firms commented on greater reluctance to decide to new projects among clients in July. Weaker demand generated a total decrease in home based business volumes at last considering that the post- referendum rebound began in September 2016. Deteriorating order books generated more cautious staff recruitment policies, as highlighted by the moderation in employment growth for the slowest for 11 months. Sub-contractor usage also decreased in the latest survey period.
July data suggested that UK construction companies replied to lower sales by shrinking purchasing activity within their sections. The latest rise in input buying was merely marginal additionally, the weakest since March. Delivery times for construction materials continued to elongate sharply, which survey respondents linked with low stocks and stretched capacity among suppliers. Meanwhile, input cost inflation remained elevated and shut into the peaks seen at the outset of 2017, that’s partly caused by prices for imported items.
Construction firms remained upbeat concerning growth prospects, but the higher level of optimism was the best since July 2016. It was produced by heightened economic uncertainty and subdued confidence among clients.