UK construction sector nears stall speed

LONDON: Britain's builders have had a difficult start to the year: construction activity remained flat during the month, according to a survey of purchasing managers in the industry. The IHS Markit construction PMI fell to 50.2 from 52.2 in December.

A reading above 50 indicates expansion while anything below signals a contraction. Analysts had expected a reading of 52. Construction struggled during 2017 as a number of big commercial and infrastructure projects came to an end and were not replaced by new projects. Builders said that uncertainty brought on by Brexit negotiations was partly to blame for the slowdown in new work. In January, house building, which had been the main driver of growth in the sector thanks to the government's Help to Buy equity loan program, contracted. This was partly offset by commercial building reversing six consecutive months of decline and an increase in civil engineering work.

Though IHS Markit wrote that the increase in commercial building was "only marginal". New job creation in the sector fell to its lowest level in 18 months while costs inflation increased following a decline in December. Sam Teague, economist at IHS Markit and author of the construction PMI said: January's PMI data indicated a difficult start to 2018 for the UK's construction sector, underlined by business activity growth slumping to a four-month low and new orders sliding back into decline. A contraction in house building added to lacklustre commercial building and civil engineering markets, and reduced inflows of new work suggest overall activity could slip into decline in February.