Construction sector still ‘downbeat’ as Brexit remains ‘roadblock’ to growth

● PMI shows weaker-than-expected reading as housebuilding loses steam

Britain’s construction sector suffered its weakest growth for six months in September as the “Brexit blot on the landscape” held back activity, according to new data.

The closely-watched Markit/ Cips UK construction purchasing managers’ index (PMI) showed a weaker-thanexpected reading of 52.1 in September, down from 52.9 in August, with house-building losing momentum.

A reading above 50 indicates growth, but economists had expected it to remain at 52.9 according to consensus figures from Pantheon Macroeconomics.

The report said the September data indicated the sector continues to be in a “downbeat mood”, with business optimism at its second-lowest level since the beginning of 2013. This comes despite the figures showing the biggest rise in new orders since December 2016.

Cips group director Duncan Brock said: “The Brexit blot on the landscape was still in evidence as housing activity slowed to a pre-april growth rate and clients hesitated to place orders.”

Civil engineering was the worst-performing sector, as activity declined at a faster rate. A lack of new work to replace completed projects was blamed, after a summer uplift caused in large part by work delayed earlier in the year.

Brock added: “This tale of feast and famine offers little in the way of reassurance and is more about holding on to stable growth than a sprint to the finish.

“The weakest overall activity in six months shows that caution and Brexit concern remain roadblocks to strong growth.”

The slower growth in housebuilding comes as Nationwide Building Society also released data yesterday showing property prices showed only a 0.3 per cent month-on-month jump in September.

Also commenting on the constructionpmiwashoward Archer, chief economic advisor to the EY Item Club, who noted that housebuilding growth slowed to a six-month low in August.

He stated: “Despite the pickup in new orders, confidence in the sector dipped to an 11-month low in September and was at the second lowest level since February 2013. Confidence was reportedly pressurised by political uncertainty and concerns over Brexit.”

It comes after the manufacturing PMI published on Monday showed a “welcome” slight improvement in September, while today will see the release of the closely watched snapshot of the powerhouse services sector.