CIPS: UK Construction Activity Growth Weakest Since Last Aug

-UK July CIPS Construction 51.9 Vs 54.8 June; Weakest Since Aug 2016

By David Robinson

     LONDON (MNI) - UK construction activity growth in July was the slowest

since last August, with the commercial sector hit by economic and political

uncertainty, the latest purchasing managers survey found.

     The headline IHS Markit/CIPS UK Construction Purchasing Managers' Index

reading dropped to 51.9 in July from 54.8 in June, the weakest outturn since

August 2016 and well below the long-run average of 54.5. The weak July

construction survey followed an upbeat July CIPS manufacturing survey, which saw

export growth hit record highs.

     A decline in commercial construction activity, which fell at its fastest

pace for 12 months, was central to the softer overall construction performance

in July. 

     "Worries about the economic outlook and heightened political uncertainty

were key factors contributing to subdued demand. Construction firms reported

that clients were more reluctant to spend and had opted to take longer in

committing to new projects," Tim Moore, Associate Director at IHS Markit, said.

     The construction sector's new business volumes fell for the first time

since August 2016.

     These data suggest that the political turbulence linked to Brexit and a

hung parliament is having diverse effects across the UK economy. While

manufacturers appear to be benefiting from the mix of currency weakness and

stronger overseas demand, the construction sector, with its reliance on large

domestic orders and facing higher costs, is struggling.

     "Continuing price pressures from the weak pound lingered, driving cost

inflation near to a six-year peak, stifling purchasing activity and jobs

growth," Duncan Brock, Director of Customer Relationships at the CIPS, said.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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