Construction buyers report resi slow down

Grant Prior 8 years ago
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A slowdown in residential construction offset increases in commercial and civil engineering work last month.

The Index stalled last month
The Index stalled last month

Latest figures from construction buyers show output unchanged in March compared to February.

But the figures show that residential work grew at its slowest pace for more than three years as other sectors surged.

The latest Markit/CIPS UK Construction PMI was 54.2 in March – unchanged on the previous month.

Tim Moore, author of the Markit/CIPS Construction PMI said : “March’s survey confirms that the UK construction sector is experiencing its weakest growth phase since the summer of 2013.

“Residential building has seen the greatest loss of momentum through the first quarter of 2016, which is a surprising reversal of fortunes given strong market fundament als and its clear outperformance over the past three years.

“Construction firms were reliant on a rebound in commercial building and resurgent civil engineering growth to offset the slowdown in housing activity.

“Civil engineering delivered its strongest performance for just over a year, suggesting that a healthy pipeline of infrastructure projects continues to boost construction output.

“However, heightened uncertainty about the business outlook appears to have weighed on overall construction demand so far in 2016, with survey respondents citing cautious client spending patterns and a reduced willingness to commit to new projects.

“As a result, volumes of new work disappointed in March as order book growth slipped for the third month in a row and reached its weakest since the pre-election blip last year.”

Mike Chappell, Global Corporates managing director for construction at Lloyds Bank Commercial Banking, said: “The mood continues to feel upbeat in construction, even if this survey suggests growth in the sector remains weak.

“In recent weeks a number of large commercial contractors have reported generally positive full-year results, helped both by an improving economy and an ever-more disciplined sector.

“A relentless focus on margins over revenue-chasing and strengthening order books are major contributing factors to this current positivity.”

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