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Housing growth continues despite construction slowdown

Housing growth continues despite construction slowdown

The growth in housebuilding has continued at a fast pace despite the rest of the UK construction sector seeing a slowdown in June.
 
Last month saw the levels of new recruitment, investment and new work all rising at a lower rate than in May, according to the latest monthly Purchasing Managers Index (PMI) survey by Markit and the Chartered Institute of Procurement and Supply (CIPS).
 
The overall PMI reading for June was 54.6, down from the 56 recorded in May but still the right side of the 50 mark that constitutes the boundary between growth and contraction. 
 
May had produced the best figures for 17 months, which puts June’s performance in some perspective, but the survey also found the level of confidence is at its lowest since December 2016, due to a mixture of economic and political uncertainty. 
 
This in turn had a negative effect for investment. IHT Markit economist Tim Moore explained: "Fragile business sentiment led to delayed decision-making on large projects and greater concern about the outlook for workloads during the next 12 months."
 
Housing proved the exception to the general rule with its second-best performance in the last 15 months. 
 
The narrowing polls as the election approached and the consequent hung parliament have added to the uncertainty, although it is possible that this issue may be less of a problem now the Conservatives have a deal in place with the Democratic Unionists to ensure the government remains in place for the next two years, a period that will cover the Brexit negotiations. 
 
However, recent economic data indicating lower growth may prove a longer-term issue for confidence levels. 
 
Government investment in large infrastructure projects may also be a victim of the political situation, with the Queen's Speech only including provision for legislation on the second phase of HS2. However, more money will now be spent on Northern Ireland, including at pinch points in the Belfast road network where three motorways enter the city centre and broadband internet provision. 

Image: iStock

 

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