Construction buyers report first drop in work for 13 months

Grant Prior 7 years ago
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Construction buyers reported a fall in workloads in September for the first time in 13 months.

The Markit/CIPS UK Construction Purchasing Managers’ Index fell to 48.1 from 51.1 in August.

It dipped below the crucial 50 mark for the first time in 13 months where 50 is the no change mark and anything above/below marks expansion/contraction.

Commercial building levels continued to struggle while civil engineering work suffered its steepest decline for four-and-a-half years.

Buyers were also pessimistic about future prospects with optimism for the next 12 months hitting its second lowest level since April 2013.

Tim Moore, Associate Director at IHS Markit and author of the report said: “A shortfall of new work to replace completed projects has started to weigh heavily on the UK construction sector.

“Aside from the soft patch linked to spending delays around the EU referendum, construction companies have now experienced their longest period of falling workloads since early 2013.

“Fragile client confidence and reduced tender opportunities meant that growth expectations across the UK construction sector are also among the weakest for four-and-a-half years.

“At the same time, cost pressures have intensified, driven by supply bottlenecks and rising prices for imported materials.

“Commercial development has been the worst performing category in recent months. Construction firms attributed falling volumes of commercial work to subdued business investment and reduced risk appetite among clients, linked to heightened economic and political uncertainty.

“Civil engineering work decreased at its fastest pace since April 2013, which prompted concerns from survey respondents about a near-term lack of new infrastructure projects.

“House building slipped down a gear in September, which highlighted that fragile confidence has spread across all three key market segments.”

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