Buyers report construction “mired in a downturn”

Grant Prior 6 years ago
Share

Construction buyers reported industry activity falling at its second-fastest rate for ten years in September.

The latest bellwether IHS Markit/CIPS UK Construction Total Activity Index posted 43.3 in September – down from 45.0 recorded in August where anything below 50 represents contraction.

The drop was the second-strongest since April 2009 and broad-based across all three categories of construction work.

Commercial activity was the worst-performing segment while civil engineering activity dropped at its sharpest rate for close to a decade while residential building recorded a fourth successive monthly fall.

Looking ahead, UK construction firms were mildly optimistic that output volumes would pick up over the coming 12 months although the level of business confidence was weak by historical standards.

Joe Hayes, Economist at IHS Markit, said: “The UK construction sector remained mired in a downturn at the end of the third quarter, according to the latest PMI data.

“Activity is being pulled down at its second-fastest clip for over a decade as firms are buffeted by client hesitancy, heightened Brexit uncertainty and a weak outlook for the UK economy.

“The commercial sector was a notable casualty in September, with building activity here falling at the fastest rate since April 2009, highlighting the damaging effects of project delays and belt-tightening.

“Low confidence has subsequently caused construction order books to fall substantially.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply said :”The construction sector offered another devastating result in September with the second fastest fall in new orders since March 2009 and the financial crisis.

“After a relentless six-month decline in order books driven by Brexit uncertainty and political indecision, this is hardly surprising.

“Residential building continued to be hit hard with a fourth successive month of deterioration but the commercial sector took the biggest brunt of this downturn spiral as clients turned their back on spending and committing to larger projects.

“This in turn had significant knock-on effects on construction employment with the biggest fall in staffing levels since December 2010.

“Such disappointing news as the sector is still recovering from a lack of skills and capacity created by the last recession.

“Looking ahead the signs do not look positive.

“Even a moderation in input prices since March 2019 and some moderate improvement in supply chain pressures will not be enough to keep the wolf from the door as no-deal looms and businesses remain Brexit unsteady.”

Latest news

New law to force tower block cladding fix by 2029

Jail threat looms as £1bn fund launched to fix unsafe social housing
9 hours ago

Infrastructure Pipeline published with 780 projects worth £530bn

New online tool to provide live updates on hundreds of schemes
14 hours ago

BAM boots Danny Sullivan off £100m HS2 bat tunnel

Contractor terminates labour supply deal on controversial project
20 hours ago

World’s largest crane lifts Hinkley dome: Video

Construction times cut by 30% on nuclear site
12 hours ago

Flannery invests £22m with JCB to boost fleet

Plant hirer strikes latest deal with machinery giant as fleet investment continues
14 hours ago

Mace confirmed for £200m Paddington overstation job

Helical JV also sets start date for 429-room student job over Southwark station
21 hours ago

Kier names new construction boss for clients and markets

Rebecca Boundy promoted to lead sector teams after year of framework wins
20 hours ago

Elements Europe went down owing supply chain £8.7m

Korean owner kept offsite specialist afloat with £71.8m of loans in bid to stem losses
2 days ago

Bristol awards £288m civils and highways framework

Eurovia, Tarmac, Colas and regional SMEs share 10-lot deal
21 hours ago

Kier seals PCSA deal for £55m Bridgend school

Heronbridge special school move back on track after cost hike and delay
21 hours ago

Mobile crane fire closes M11 motorway

City Lifting machine catches fire in Essex
21 hours ago

Altius and Erith win landmark London tower rebuild

Westminster council advances Huguenot House redevelopment
2 days ago

Corbyn suppliers left £4.4m out-of-pocket

£33m-turnover civils contractor only employed eight staff
3 days ago

McAlpine to restore England’s largest Victorian water tower

Colchester’s iconic ‘Jumbo’ to be reborn as visitor destination
2 days ago

Andrew Scott lands £20m Grand Pavilion revamp in Porthcawl

Restoration of landmark Art Deco building gets underway with 2027 finish target
2 days ago

Keepmoat profit drops 35% as completions slide

Land pipeline expands to 24,400 plots as firm eyes rebound
2 days ago

Bid race begins for £425m water transfer scheme

Contractors invited to help shape Affinity Water project
2 days ago

Legacy building defects return to haunt Barratt Redrow

House builder sets aside £248m for Redrow fire and concrete frame fixes
3 days ago

Skanska agrees £153m price to revamp A47 Thickthorn junction

New link roads and underpasses to ease traffic near Norwich
3 days ago

First tower plans go in for £1bn Liverpool Pier Head site

First design will "set tone" of scheme which could contain 60-storey tower
3 days ago

Barhale creates new low-carbon chief board role

Haddon takes board seat while Solomon becomes eastern regional director
3 days ago

Met Police preps £300m framework for estate upgrade

Early market talks start ahead of October bid contest
3 days ago

Raft of SME firms win £94m framework places

More than 50 demolition and asbestos specialists chosen: Full list
3 days ago

GRAHAM gets go-ahead for £110m Boddingtons Brewery revamp

Work to start this summer after Gateway 2 approval secured
4 days ago

Thames Water finance chief joins BAM UK & Ireland

Abigail Farrell-Black joins contractor as new finance head after senior roles at Thames and Southern Water
4 days ago

FM Conway profit jumps to £33m under Vinci

Turnover hits £608m and cash surges £68m just two months into new ownership
4 days ago

McAlpine breaks ground at £1.25bn Port Talbot green steel job

Port Talbot switch to scrap-powered production by 2027
4 days ago

Cappagh lands £136m Portsmouth Water deals

Utility specialist wins AMP8 contracts for infrastructure and smart meters
4 days ago

Rethink over “anti-dumping” tariffs on Chinese diggers

Fair trade body reconsiders ruling after lobbying by manufacturers
4 days ago

Sparks agree near 4% wage increase from 2026

Top hourly rate in London to rise to £26.70 under JIB deal
4 days ago