Brexit worries ‘are holding construction sector back’

OUTPUT IN Britain’s construction sector grew at the slowest pace for three months in December as Brexit worries continue to hold the industry back.

The Markit/CIPS UK Construction purchasing managers’ index (PMI) fell to 52.8 in December, down from 53.4 the previous month.

A reading above 50 indicates growth but economists had been expecting a reading of 52.9.

December’s modest rate of expansion was the slowest seen since September 2018.

Tim Moore, of IHS Markit, which compiles the survey, said: “UK construction firms signalled a slowdown in housing and commercial activity growth during December, which more than offset a strong performance for civil engineering at the end of 2018.

“Subdued domestic economic conditions and an intense headwind from political uncertainty resulted in the weakest upturn in commercial work for seven months.”

Commercial building was the worst performing category, while work on civil engineering

BLANE PERROTTON: ‘The construction industry ended the year much as it began.’

projects was the strongest area of construction activity.

Construction companies cited “heightened political uncertainty” resulting in delays to spending decisions among clients, especially in relation to commercial development projects.

Duncan Brock, group director at the Chartered Institute of Procurement and Supply, added: “With a slight rise in new orders and a softening in overall activity growth, firms continued to be impacted by Brexit-related uncertainty and reluctance by clients to place orders especially for commercial projects.”

However, business confidence was the highest since last April and well above the near six-year low seen in October.

Survey respondents were buoyed by a boost to growth from work on big-ticket transport and energy infrastructure projects in 2019.

Blane Perrotton, managing director of the national property consultancy and surveyors Naismiths, commented: “The construction industry ended 2018 much as it began the year; licking its wounds, scratching its head and trying vainly to work out where next for the economy’s most volatile sector.

“Despite enjoying the dubious honour of the highest insolvency rate of any industrial sector, Britain’s builders limped across the line with their heads held high.”

There was a slowdown in housing and commercial growth. Tim Moore of IHS Markit .