- Reuters / Neil Hall
LONDON – Growth in Britain’s construction sector slumped to its lowest level since the immediate aftermath of the Brexit referendum in July, the latest PMI survey from IHS Markit and CIPS showed.
IHS Markit and CIPS’ latest PMI release for the construction sector – which measures expectations of growth – came in at 51.9 for the month of July.
That was down from a reading of 54.8 in June, and even further below the 56 reading from May.
“UK construction companies recorded another growth slowdown in July, reflecting lower volumes of commercial building and a softer expansion of housing activity,” a release said.
“The latest survey also revealed a reduction in new business volumes for the first time since August 2016, which acted as a headwind to job creation and input buying across the construction sector.”
The purchasing managers index (PMI) figures from IHS Markit are given as a number between 0 and 100. Anything above 50 signals growth, while anything below means a contraction in activity – so the higher the number is, the better things look for the UK.
Here is the chart:
- IHS Markit
Commenting on the numbers, Tim Moore, associate director at IHS Markit said:
“July data reveals a growth slowdown in the UK construction sector, mainly driven by lower volumes of commercial development and a loss of momentum for house building. Weaker contributions from the cyclically sensitive areas of construction activity more than offset resilience in the civil engineering sector.
“Worries about the economic outlook and heightened political uncertainty were key factors contributing to subdued demand. Construction firms reported that clients were more reluctant to spend and had opted to take longer in committing to new projects.”
The slowdown in Britain’s construction sector comes as estate agents also struggle to remain relevant in an increasingly competitive market.
Profits at Countrywide and Foxtons, two of the UK’s biggest estate agents, fell sharply last quarter on a downturn in property transactions, while a fifth of UK estate agents are at risk of going bust as they struggle against the shift to online firms, according to a report from accountants Moore Stephens.