Contractors set for extended “soft patch” in project starts

Grant Prior 7 months ago
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Construction buyers reported another fall in work volumes in October making it six successive monthly drops.

The rate of contraction was the slowest in three months.

But authors of the bellwether Markit/CIPS UK Construction Total Activity Index said the industry is now preparing for a longer term drop in demand.

The index registered 44.2 in October – up from 43.3 the previous month but still below the 50no-change threshold.

Tim Moore, Economics Associate Director at IHS Markit said: “There are clear signs that construction firms are positioning for an extended soft patch for project starts, as highlighted by a further decline in purchasing volumes and another month of cuts to workforce numbers through the non-replacement of voluntary leavers.”

Civil engineering was the worst performing sector with business activity falling at the fastest rate for ten years.

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply:”The construction sector’s distressing decline continued in October in spite of a small improvement in the headline index as a resolution to the political impasse seemed close.

“However with a fall in civil engineering not seen for a decade and the biggest drop in housebuilding since 2016, it appears that strength in the sector is seeping away.

“Jobs hiring suffered as businesses unsure of the Government’s next steps held back on their development plans, which were weakened further by stronger competition for fewer opportunities. Future optimism remained at 2012 levels as the deep-seated Brexit gloom dampened down expectations.

“To say these figures are disappointing is a big understatement. Given that the next political hurdle is December’s General Election, all eyes will be on the new administration and clear direction, because at the moment there is little insight into what could possibly pull the sector out of its ditch.”

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