Brexit cited as reason for construction slowdown
The latest construction industry purchasing managers index (PMI) has dropped from a high of 55.8 in July to just 52.9 during August - far behind the prediction of economists at 55.0. Uncertainty regarding Brexit has been suggested by many building firm owners as the reason for the slowing of growth.
When looked at on a sector basis, civil engineering projects appear to be worst hit with the amount of work in this area decreasing for the first time in five months. House building has also slowed, while commercial construction showed the best growth across the month.
The survey is published by IHS Markit; Tim Moore from the publisher has stated that the industry has slipped back, following a surge that took place after the poor weather at the start of the year.
The Group Director at the Chartered Institute of Procurement and Supply, Duncan Brock has pointed out that cracks were starting to show this month and house building has been particularly hard hit with performance showing as being the worst since last March. He said that growth has been held back by uncertainty over Brexit. Supply issues and skills shortages have also caused problems.
Brock has said that the rate of hiring in the industry has remained strong, but he points out that an index value less than 50 indicates negative growth and that the sector appears to be hovering very close to that mark, indicating possible disappointment next month.
These figures mimic those released for the month in the Eurozone, indicating a possible drop in the UK’s export markets, which could continue to limit growth for the year. Despite this experts hope that the government's construction announcements for 300,000 residential homes that were made late last year will come to fruition.