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CIPS: UK Construction Activity Falls For First Time In 13-Mths

MNI (London)
--UK September CIPS Construction 48.1 Vs 51.1 August
--New Orders And Input Buying Both Decline
By Kieran Williams
     LONDON (MNI) - The UK construction sector weakened further in September
after losing momentum in August according to the latest purchasing managers
survey, with the reading below 50 denoting a drop into contractionary territory.
     The decline was attributed to fragile confidence and a diminished appetite
for risk in the commercial building sector in particular, political and economic
uncertainty were once again adduced.
The headline IHS Markit/CIPS UK Construction Purchasing Managers' Index reading
slipped to 48.1 in September from 51.1 in August. Since May's 17-month high of
56.0, the PMI has slipped south, falling for four straight months and receding a
cumulative total of 7.9 points. The September reading denotes the steepest drop
in aggregate construction output since July 2016.
The weak construction survey follows a weaker manufacturing PMI yesterday, taken
together these survey's highlight the difficult economic conditions facing the
     The decline was broad based with falls in both commercial and civil
engineering in September, civil engineering in particular seeing the fastest
drop in four and a half years -- notably firms highlighted a lack of new work.
This was reflected in a drop in both new business volumes and lower input
buying, the latter dropping for the first time in six months.
     Housing activity was the only subcomponent of the survey that managed to
stay in expansion in September, however even here the pace slowed. Samuel Tombs,
Chief U.K. Economist at Pantheon Macroeconomics, notes that "the housing
activity index declined to a six-month low of 53.1 in September, from 56.4 in
August; the prospect of higher mortgage rates appears to have dampened new buyer
"A shortfall of new work to replace completed projects has started to weigh
heavily on the UK construction sector" Tim Moore, Associate Director at IHS
Markit, said. Moore added that "Fragile client confidence and reduced tender
opportunities meant that growth expectations across the UK construction sector
are also among the weakest for four-and-a-half years. At the same time, cost
pressures have intensified, driven by supply bottlenecks and rising prices for
imported materials."
--MNI London Bureau; tel: +44 203-586-2225; email:
--MNI London Bureau; +44 203 865 3809; email:
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MNI London Bureau | +44 203-865-3812 |

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