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Brexit uncertainty rocks UK construction industry

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World Cement,

September was a difficult month for the UK construction sector, according to the latest IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI). The index recorded a sustained drop in new work for the first time since August 2016.

The seasonally adjusted PMI registered 48.1 in September, down from 51.1 in August and below the 50.0 score that indicates no-change.

“A shortfall of new work to replace completed projects has started to weigh heavily on the UK construction sector,” said Tim Moore, Associate Director at HIS Market and author of the IHS Markit/CIPS UK Construction PMI.

Excepting the period around the EU referendum, the September score marks the longest period of falling workloads since 2013.

“Fragile client confidence and reduced tender opportunities meant that growth expectations among the UK construction sector are also among the weakest for four-and-a-half years,” continued Moore. “At the same time, cost pressures have intensified, driven by supply bottlenecks and rising prices of imported materials.”

The “obstructive economic conditions and the Brexit blight of uncertainty” has led to deep uncertainty over new projects, said Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement and Supply (CIPS). “It is unclear where any major shift in momentum for the sector will come in the next few months.”

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