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Slowdown continues in UK construction market

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World Cement,

August saw the weakest upturn in the UK construction market for a year, according to the latest IHS Markit/CIPS UK Construction Purchasing Managers Index (PMI), continuing a summer slowdown in the industry. Although the PMI remained above 50.0 – indicated market growth – the score of 51.1 represented a fall from the July’s 51.9 and the weakest overall performance since August 2016.

“UK construction companies indicated that lacklustre growth conditions persisted during August,” said Tim Moore, Association Director at IHS Market and the author of the index.

”Survey respondents noted that subdued business investment and concerns about the UK economic outlook had led to a lack of new work to replace completed projects, especially in the commercial building sector,” Moore continued.

Commercial work dropped at its fastest pace since July 2016, as clients opted to delay spending decisions and scale back planned projects. Civil engineering work was also weak, although residential construction bucked the trend, rising at a “robust and accelerated pace.”

“Any further drag on the construction sector overall was halted by the continuing strong performance by housebuilders, defying expectations with a good month” said Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement and Supply (CIPS).

In August, BMI Research forecast a slowdown in UK construction sector growth, after a stronger 1H17. The research company anticipated annual growth of 1.4%, compared to 2.38%.

“There were signs than UK construction firms are bracing for the soft patch to continue into this autumn, with fragile business confidence contributing to weaker trends for job creation and input buying during August,” Moore concluded.

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