Lack of new or­ders leads to slow down in UK con­struc­tion in­dus­try

Belfast Telegraph - Business Telegraph - - News - BY BEN WOODS

AC­TIV­ITY in the UK’S con­struc­tion in­dus­try un­ex­pect­edly slowed to a one-year low in Au­gust as new busi­ness slumped for the sec­ond month in a row.

The closely watched Markit/cips UK Con­struc­tion pur­chas­ing man­agers’ in­dex (PMI) showed a read­ing of 51.1 last month, down from 51.9 in July with economists’ ex­pect­ing 52.

A read­ing above 50 in­di­cates growth. The PMI re­port pointed to a lack of new or­ders as the trig­ger for the slow down, with a healthy per­for­mance from house­build­ing be­ing coun­tered by the sharpest drop in com­mer­cial devel­op­ment since July 2016.

Ster­ling was marginally down against the US dol­lar at 1.294 fol­low­ing the up­date and was 0.5% lower ver­sus the euro at 1.086. It comes as out­put at UK fac­to­ries un­ex­pect­edly pushed to a four-month high in Au­gust in an en­cour­ag­ing sign for the over­all econ­omy fol­low­ing a lack­lus­tre start to the year.

Tim Moore, as­so­ciate di­rec­tor at IHS Markit, said: “Sur­vey re­spon­dents noted that sub­dued busi­ness in­vest­ment and con­cerns about the UK eco­nomic out­look had led to a lack of new work to re­place com­pleted projects, es­pe­cially in the com­mer­cial build­ing sec­tor.

“There were signs that UK con­struc­tion firms are brac­ing for the soft patch to con­tinue into this au­tumn, with frag­ile busi­ness con­fi­dence con­tribut­ing to weaker trends for job cre­ation and in­put buy­ing dur­ing Au­gust.”

Em­ploy­ment was also suf­fer­ing in re­sponse to the weak or­ders and ac­tiv­ity.

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