Latest UK PMI report reveals weakest construction performance since August 2016

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4th August 2017 11:45 - Construction

Latest UK PMI report reveals weakest construction performance since August 2016: For the first time since the aftermath of the Brexit referendum, the construction Purchasing Manager’s Index dropped from 54.8 in June to 51.9 in July 2017; resulting in an 11 month decline in the overall construction index.

Published on the 2nd of August 2017, the Purchasing Manager’s Index, (PMI), details the UK’s construction performance in July 2017, and includes findings about residential and commercial work, as well as civil engineering activity.

The UK construction PMI reveals that residential construction and commercial construction are on a decline, with commercial work falling at the quickest rate. Whereas, civil engineering activity is on a slight increase, despite its decline in this year’s first quarter.

The lack of commercial development is a big contributing factor to the slowdown of growth as, throughout the year, commercial work fell at the fastest rate.  

Nonetheless, residential activity has been the strongest performing subsector, despite progressing at the slowest rate over the past three months.Latest UK PMI report reveals weakest construction performance, since August 2016

With many projects moving towards housing, and less on commercial build, construction firms have tightened their expenditure, as prices for construction materials increase at the sharpest rate, since 2011’s first quarter.

Yet, it has been reported that the uncertainty of the UK’s political climate and lack of economic security, has resulted to construction contractors holding back from taking on new projects.

Commenting on the latest market research, Associate Director at HIS Markit, Tim Moore, adds:  

“There was a knock-on impact for job creation and input buying following the largest downturn in order books since August 2016. However, supply chain pressures remained intense, reflecting low stocks among vendors, and materials prices continued to rise at one of the fastest rates seen for six years.”

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