Building blow as construction output dips

Britain’s construction sector has suffered a “loss of momentum” as Brexit concerns continue to impact sentiment.

Releasing their latest construction purchasing managers’ index (PMI) yesterday, Markit and Cips said the main activity reading fell to 52.9 last month, down from 55.8 in July. While any figure above 50 signals growth, the result was well below economists’ expectations of 54.9.

A PMI sounding for the UK’S powerhouse services sector was due to be released today. August’s construction data pointed to a “renewed slowdown” in output growth across all three categories of activity – commercial, residential and civil engineering.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “Cracks in the construction sector’s masonry were beginning to show again this month, and the house-building subsector was hit the hardest as it reported the poorest performance since March this year.

“Levels of new work held moderately steady overall, but with any significant growth held back by Brexit uncertainty. It was also the logjams in supply routes that hampered work in hand where material and skills shortages meant vendor performance deteriorated to its worst level since March 2015.”

Howard Archer, chief economic adviser to the EY Item Club, said: “The construction sector still looks set for reasonable growth in the third quarter. This follows output recovering in the second quarter after a very difficult first quarter that was only partly due to the severe weather.” 0 Howard Archer hopeful of ‘reasonable’ growth in Q3