UK construction sector growth slowed sharply in July to its weakest pace in 11 months, a survey has shown, with economic and political worries cited as a drag amid Brexit uncertainty.
New orders declined for the first time since last August, amid reports that some companies were more reluctant to spend and were taking longer to commit to new projects. The survey from the Chartered Institute of Procurement & Supply (CIPS) also signals construction employment grew at the weakest pace in 11 months in July, while sub-contractor usage fell.
CIPS’s purchasing managers’ index for UK construction, which measures activity in the sector, tumbled from 54.8 in June to 51.9 in July on a seasonally-adjusted basis. While remaining above the level of 50 deemed to separate expansion from contraction, this drop signalled a sharp slowdown in growth.
Lower volumes of commercial property construction and a softer expansion of housebuilding activity were highlighted by the survey. Faster output growth was recorded in the civil engineering sub-sector.
CIPS, which cited the impact of Brexit, worries over the UK economy, and post-General Election uncertainty, said: “A number of survey respondents cited delays in decision-making by clients, linked to worries about the economic outlook and heightened political uncertainty.”
It added: “Construction firms commented on greater reluctance to commit to new projects among clients in July.”
Tim Moore, survey author and associate director at IHS Markit, flagged “weaker contributions from the cyclically sensitive areas of construction activity”.
Howard Archer, chief economic adviser to the EY ITEM Club think-tank, said: “This is a disappointing survey across the board, pointing to the construction sector being hit by increased client caution amid heightened economic and political uncertainties.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here