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Construction output continues expanding

Construction output continues expanding

The UK construction sector has continued expanding over the past month, the latest data has shown.

Markit and the Chartered Institute of Procurement and Supply gave a reading of 52.2 for activity in the Purchasing Managers Index (PMI) survey for March, above the 50 mark that forms the boundary between growth and contraction, but slightly down on February's 52.5. This made it the weakest month since the current period of post-referendum growth started in September last year.

Key features of the past month included an improving outlook for commercial and civil engineering activity. The latter category enjoyed its best month so far in 2017, suggesting infrastructure projects may be a big driver of growth in the months ahead, as many commentators have suggested. However, the increase in housebuilding was weaker than in February and with only a small rise in overall workloads, new recruitment was down. Even so, the number of people employed in the sector continues to rise.   

Moreover, despite the Brexit process now being underway, the sentiments expressed by survey respondents were mainly positive, with fears over Brexit down on previous months. Half of those interviewed said they still expect business to expand over the next 12 months, compared with just nine per cent anticipating a contraction. 

Analysing the survey, director of consumer relationships at CIPS Duncan Brock said: "Where the housing sector acted as the main engine of growth over the last four years, this month it was slower and stuttering, while overall purchasing activity in the construction sector was disappointingly tame, shackled by a lack of new orders and rising costs."

He added that the sector will now need to keep an "attentive eye" on the Brexit negotiations now Article 50 has been triggered.

The survey follows the publication of the PMI survey for manufacturing yesterday (April 3rd). This also showed continued - but slightly reduced - growth in March compared with February, as the reading dipped from 54.5 to 54.2. The PMI survey for services will be published tomorrow.

Image: iStock

 

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