Britain's construction sector growth moderated in June from a 17-month high as firms delayed placing orders amid heightened economic uncertainty, survey results from IHS Markit and the Chartered Institute of Procurement & Supply showed Tuesday.
The Purchasing Managers' Index for construction dropped more-than-expected to 54.8 in June from 56.0 in May. The expected reading was 55.0. Nonetheless, any reading above 50 indicates expansion in the sector.
In June, softer growth momentum was recorded across all three broad categories of construction activity.
Residential building continued to outperform commercial work and civil engineering in June. The latest growth in housing activity was still the second-fastest since December 2015.
Data showed that business activity, new orders and employment all expanded at slower rates than in May.
Respondents said that a lack of new work to replace completed projects had weighed on construction growth in June. New work grew at the weakest pace since March.
Reflecting the trend for new business, construction companies registered the slowest rise in employment numbers for three months in June.
British construction companies reported another steep increase in their average cost burdens in June. The overall rate of inflation rebounded since May and was the strongest for three months.
A combination of resilient demand for construction materials and stretched supply supported the latest round of price rises by vendors.
Construction companies were the least optimistic about their near-term growth prospects since December 2016.
The easing in construction activity is not a cause of concern, Capital Economics' Ed Stansfield said. There is little in the latest survey to set alarm bells ringing in commercial property markets, the economist added.
by RTT Staff Writer
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