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Construction growth dips to 10-month low

Growth in the UK construction industry unexpectedly fell in February, according to the Markit/CIPS UK Construction Purchasing Managers’ Index (PMI), which showed the slowest results for 10 months.
The survey showed the index had weakened to 54.2 from 55.0.

Housing activity expanded at the slowest pace since June 2013, and, for the first time since January 2013, residential building was the worst performing sub-category of construction output. Moreover, growth of commercial building work also moderated in February, with the rate of expansion the softest since the election-related slowdown in May 2015. Civil engineering bucked the overall trend, however, with growth accelerating to its fastest for five months.

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI® , said: “UK construction firms remained in expansion mode during February, but a loss of momentum within the residential building sector meant that overall output growth was the weakest since April 2015. Aside from the pre-election slowdown last year, the latest upturn in construction output was the weakest for over-two and-a-half years. ”

David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said: “The sector felt the pressure of challenging global economic conditions and softer demand growth as purchasing activity expanded at its weakest pace since April 2015. Suppliers’ delivery times got longer and some stock shortages added to their woes. The housing sector, which once led the way with a robust performance, offered a poor show – the weakest growth for just over two-and-a-half years. And, though overall growth was maintained, business confidence for the future was at its lowest since December 2014.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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