The latest figures reveal construction output declined in January, reaching a 10-month low…
The UK construction sector has hit a 10-month low for output, it has emerged. According to the latest PMI, figures are down to 54.2, a reduction on the 55.0 seen in January. The figures seen in February represent the worst performance in the sector for 10 months.
Activity was reportedly restricted last month due to difficulties finding skilled staff and the prospect of the country exiting the EU. While the figure is still above the 50.0 value that means growth is occurring, the latest reading suggests one of the weakest rises in construction output seen over the past two and a half years.
Tim Moore, a senior economist at Markit, said: “Survey respondents noted that underlying business conditions remained favourable, especially in relation to commercial building and infrastructure-related work, but some clients had been hesitant to commit to new projects so far in 2016,” he said.
“Reflecting this, new order growth weakened again and construction firms were the least optimistic about their year ahead growth prospects since December 2014.”
Mike Chappell, a construction specialist at Lloyds’ commercial arm, said: “The conversations I’ve had with those in the industry over the past month have been largely positive and many will be surprised to see a dip in the PMI reading,” he said.
“Commercial construction is increasingly buoyant, while in infrastructure, sentiment is also positive, in spite of a number of key projects taking longer than expected to break ground.
“The reality is [that] contractors are used to such delays and are otherwise comforted by the positive rhetoric suggesting improving the UK’s infrastructure is a long-term priority.
“The great unknown, however, remains Brexit. Many construction firms generate the bulk of their revenues in the UK, but also rely on a steady stream of skilled workers from the EU.
“They are therefore considering how a vote to leave the union might impact these current arrangements.”
