MNI: UK Construction Activity Slows To Four-Month Low In Jan

-CIPS/IHS Markit UK Construction PMI 50.2 in Jan Vs 52.2 Dec

By Jamie Satchithanantham

     LONDON (MNI) - The UK construction sector made a subdued start to 2018 with

total activity barely rising, the latest IHS Markit/CIPS survey showed.

     The UK Construction Purchasing Managers' Index (PMI) fell 2 points to 50.2

in January, down from 52.2 in December. Though this was the fourth consecutive

monthly reading above the 50.0 no-change threshold, January's outturn leaves the

headline index at a four-month low and just a slither above the neutral-mark

meaning output in the sector barely expanded. 

     The sector was forecast to have to have weighed on Q4 GDP growth, with the

Office of National Statistics pencilling in a -1.0% q/q fall in output, and the

January PMI result suggests this uninspiring form may extend into Q1 2018. 

     CIPS reported that residential building fell back into contraction in

January, after December's strong rise, while work in the commercial sector and

civil engineering was described as "near-stagnant", despite activity edging up

marginally.

     --FORWARD GUIDANCE

     There was some evidence that activity may pick-up in the new year, however,

with many firms anticipating an increase in new project wins later in the year.

     Elsewhere, the rate of job creation eased to an 18-month low, in line with

the reduced growth of building activity while cost pressures remained intense in

January despite softening a touch from December.

     "A contraction in house building added to lacklustre commercial building

and civil engineering markets, and reduced inflows of new work suggest overall

activity could slip into decline in February," Tim Moore, Associate Director at

IHS Markit, said.

     "Survey respondents reported increased hesitance among clients to invest in

new projects amid heightened concerns over the UK economic outlook.

Encouragingly, however, firms generally expect things to improve later in the

year," he added. 

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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