Construction buyers report another month of falling output

Grant Prior 5 years ago
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Construction buyers saw workloads slip for the second month is succession in March.

It is the first time the bellwether IHS Markit/CIPS UK Construction Total Activity Index has recorded back-to-back falls in output levels since August 2016.

The index posted 49.7 – up fractionally from 49.5 in February but still below the 50.0 no-change threshold.

Buyers reported another fall in commercial work and civil engineering activity which more than offset a modest upturn in residential building.

Joe Hayes, Economist at IHS Markit, which compiles the survey said: “Fears that the recent weakness of the UK construction sector may not be just a blip, but a sustained soft patch, were further fuelled by latest data.

“Amid subdued inflows of new work, a first back-to-back decline in output since August 2016 was recorded.

“Brexit-related uncertainty continued to generate indecisiveness, ultimately hitting order book volumes. Furthermore, strong competition for contracts was also reported by some panel members.

“The outlook was subsequently underwhelming by historical standards, with the unsettled political and economic environment keeping business confidence below its long-run average.

“Nevertheless, UK construction businesses ramped up their purchases of materials and other inputs, reflecting efforts to build safety stocks ahead of any potential Brexit-related disruptions.

“As such, supply chain constraints persisted and average input lead times lengthened once again.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply said: “It is unlikely that next month will bring about any positive news given the challenges of a weaker UK economy, volatile pound and intense competition for new orders, as Brexit continues to cast a long shadow over the sector’s future.”

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