According to the latest Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI®) report, UK construction companies indicated a strong expansion of business activity in November, but the overall pace of growth moderated for the second month running to its least marked since October 2013. The seasonally adjusted Markit/CIPS UK Construction PMI® fell to 59.4 during the month, from 61.4 in October.
“The construction sector remains a strong growth engine within the UK economy, but momentum has undoubtedly cooled since the summer,” Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI®. “November’s survey highlights that housing, commercial and civil engineering activity all expanded at the slowest rates for over a year. A less favourable overall economic newsflow was cited as the key factor dampening otherwise buoyant demand patterns across the UK construction sector.”
All three broad areas of construction activity registered softer rates of expansion in November, led by a marked slowdown in civil engineering. The latest expansion of civil engineering activity was the weakest since July 2013. Meanwhile, residential building was the strongest performing area of activity in November. However, house building and commercial construction activity both expanded at the least marked rates since October 2013.
The adjusted Markit/CIPS UK Construction PMI® data pointed to a rise in new business volumes for the nineteenth successive month. However, the rate of expansion eased to its weakest since June 2013.
Despite softer rates of output and new business growth, the latest survey pointed to resilient and strong job creation across the construction sector.Moreover, the pace of employment growth picked up slightly since the previous month and was still relatively close to the survey-record high seen in July. Meanwhile, increased workloads contributed to a solid rise in sub-contractor usage in November.
Looking ahead, construction firms remain (on balance) highly optimistic about the prospects for output growth at their units over the year ahead.Anecdotal evidence highlighted improving underlying demand, strong pipelines of residential building projects and a general rise in new invitations to tender across the UK regions. However, the overall degree of optimism eased slightly in November to a 13-month low, with some construction firms citing concerns among clients regarding the wider economic outlook.
Adapted from press release by Rosalie Starling
Read the article online at: https://www.worldcement.com/europe-cis/08122014/uk-construction-pmi-eases-to-13-month-low-in-november-969/