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

--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

UK.

     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

demand."

"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: les.commons@marketnews.com

--MNI London Bureau; +44 203 865 3809; email: kieran.williams@marketnews.com

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