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UK construction sector growth slows in June

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World Cement,

The UK construction sector slowed in June from May’s 17-month high, according to the IHS Markit/CIPS UK Construction PMI. The seasonally-adjusted index stood at 54.8 in June, down from 56.0 in May.

Although down from the previous month, June’s date still indicated an overall upturn in business activity within the UK construction sector – the tenth consecutive month that this has been the case. Survey respondents indicated a renewed caution within the sector, however, in response to heightened political and economic uncertainty.

“Fragile business sentiment let to delayed decision-making on large projects and greater concern about the outlook for workloads during the next 12 months,” said Tim Moore, Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI.

“While construction firms remain upbeat overall about their near-term growth prospects, the degree of confidence fell to its lowest so far this year,” Moore continued.

Despite the slower growth, supply chain pressures remained high, as did input price inflation, driven by resilient demand and upward pressure on costs related to imported construction materials.

“While new business wins were less in evidence, demand for materials remained high, as suppliers scrabbled to meet the need for a number of materials in short supply and their performance worsened as their delivery times lengthened,” said Duncan Brock, Directory of Customer Relationships at the Chartered Institute of Procurement and Supply (CIPS).

Although the trend remains positive, there appears to be “some doubt edging into the psyche of the construction industry,” continued Duncan on the rising risk picture. In addition to higher input prices, there is the possibility of an interest-rate rise from the Bank of England, while the availability of skilled workers remained an issue, given current uncertainty around the Brexit process.

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