Data released from Markit Economics and the Chartered Institute of Procurement and Supply has shown that UK construction growth has fallen to a seven-month low in November. The Markit/CIPS Construction Purchasing Managers Index (PMI) was down 3.5 points at 55.3. This is the second lowest level in total output growth since the middle of 2013, after the pre-election fall in April this year.
All three sub categories of construction – residential, commercial and civil engineering activity – suffered declines, with residential construction being the biggest loser, dropping to its lowest level since 2013 and below the level of commercial construction for the first time this year. Tim Moore, the author of the Markit/CIPS Construction PMI, said: “Residential activity lost its position as the best performing sub-category, but a supportive policy backdrop should help prevent longer-term malaise.”
Commercial construction had a small drop in growth after reaching its highest level since January in the previous month. Civil engineering activity continued as the lowest performing sub-category.
According to the survey, there were “some reports from survey respondents that cited a lack of new work to replace completed projects in November, which in turn acted as a drag on business activity growth.” Growth in job creation in the construction sector also fell, this time to its lowest level since September 2013.
Even with the seemingly discouraging news, “survey respondents remain highly upbeat about the business outlook, with over half (55%) forecasting a rise in output over the year ahead and only 5% expecting a fall”.
Moore has an overall positive view on the short-term future of UK construction, saying: “The UK construction recovery is down but not out … a healthy flow of new tenders from public and private sector clients is expected to provide a tailwind to growth heading into 2016.”
