UK Construction ‘Weighed Down’ By Weaker Housing Activity

The construction sector in the UK appeared to slow down growth-wise in March, the latest Markit/CIPS UK Construction Purchasing Managers’ index has revealed, driven by a weaker increase in residential building activity.

A marginal increase in new work was registered as well, which has also contributed to a slight fall in input buying and slower employment growth. Despite this, however, companies do still seem to be upbeat about their growth prospects in the near future, with optimism relating to business activity over 12 months picking up in March to reach its second-highest level since December 2015.

Those asked also noted that anxiety surrounding Brexit has abated somewhat and the resilient economy has had a positive impact where new invitations to tender are concerned. With just nine per cent of the survey panel predicting a decline in business activity in the year ahead, an improvement in business confidence relating to growth has been underpinned.

“This downbeat effect took a small bite out of any strong rises in employment levels, as the increase in staff hiring was at a three-month low. But as the sector showed strong optimism for future business, concerns over the skilled labour availability are likely to persist in coming months.

“Pressure on suppliers remained intense, as they battled against lower stocks and made greater efforts to fight the pincer movement of a shortage in some materials and the continued force of higher global commodity prices,” director of customer relationships at the Chartered Institute of Procurement & Supply (CIPS) Duncan Brock said.

At the start of March, the survey revealed that construction companies in the UK saw a sustained expansion of business activity in February overall, with civil engineering overtaking housebuilding as the main driver for growth.

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