Construction activity slowed in March, according to the latest Markit/CIPS UK Construction Purchase Managers’ Index (PMI). The seasonally-adjusted index dropped from 52.5 in February to 52.2 in March, as growth slowed on the back of a weaker rise in residential building activity.
“UK construction firms experienced a growth slowdown in march, with the loss of momentum centred on housebuilding,” said Tim More, Senior Economist at IHS Market. “A weaker trend for residential work has been reported throughout 2017 so far, which provides an indication that the cooling UK housing market has started to act as a drag on the construction sector.”
The slowing of growth in the housing sector offset a rebound in both commercial and civil engineering activity. Growth in the latter was the fastest so far in 2017 and the strongest of the three subcatagories monitored in March.
“Civil engineering projects were the construction sector’s main growth engine in March, driven by rising infrastructure spending and a strong pipeline of new work throughout the UK,” continued Moore.
Despite the slowdown in growth, construction companies remain relatively upbeat about their near-term growth prospects. Optimism regarding year-ahead business activity picked up in March to its second-highest since December 2015.
“Business confidence was among the highest seen since the end of 2015, which construction companies linked to upcoming tender opportunities, plans for increased marketing expenditure, and hopes of a sustained recovery,” concluded Moore.
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