UK construction activity cools

Activity in the UK construction industry endured a surprise slowdown last month, sliding to its lowest level for nearly a year as commercial building eased.

The closely watched Markit/ Cips UK construction purchasing managers’ index (PMI) fell to 51.9 in July, down from 54.8 in June with economists expecting a figure of 54.1.

Any reading above 50 indicates growth.

It noted that lower volumes of commercial building and weaker housebuilding growth took its toll on the industry, with political uncertainty and concerns about the economy weighing on demand.

The number of new orders also dropped for the first time since August 2016, causing employment growth to sink to an 11-month low.

It comes as Britain’s factories enjoyed a welcome bounce-back in July thanks to the strongest surge in export orders for more than seven years.

Duncan Brock, director of customer relationships at the Chartered Institute of Procurement & Supply (Cips), said: “The number of new orders dropped significantly this month and at the fastest rate since August 2016, as commitment-averse clients contributed to the sector’s weak trajectory.

“Commercial building activity slowed for the first time in five months and was the main drag on the Index.

“Housing, the shining light of the sector, eased marginally, but produced the slowest growth since April, as parallels with the darker days of Brexit, worries about the UK economy and post-election uncertainty can be seen across the construction sector.”

The pound dipped against the euro at about €1.11 following the update and was up marginally versus the dollar.