UK Construction Sector Growth At 9-Month Low

RTTNews · 07 Jul 2022 62 Views

The UK construction sector activity growth weakened to a nine-month low in June as the uncertain economic outlook weighed on demand, survey results from S&P Global showed on Wednesday.

The headline S&P Global/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index fell to 52.6 in June from 56.4 in May. The expected score was 55.0.

The score remained above the neutral 50.0 mark for the seventeenth consecutive month in June. Nonetheless, the reading signaled the slowest rate of growth since September 2021.

The gloomy business outlook and worsening consumer demand due to the cost of living crisis combined to put the brakes on construction growth in June, Tim Moore, an economics director at S&P Global Market Intelligence said.

Among sectors, civil engineering was the most resilient sub-sector in June. The commercial segment also reported growth but the rate was the slowest so far this year.

House building was the weakest-performing area of construction activity for the fourth consecutive month. The segment contracted for the first time since May 2020.

The survey showed that total new orders increased at a slower pace as there was a lack of new work to replace completed projects.

Efforts to boost capacity in response to greater overall workloads contributed to another robust rise in staffing numbers. Firms reported shortages of candidates to fill vacancies, despite higher wage offers.

Firms registered an increase in purchasing prices in June mainly due to rising energy, fuel and transportation costs.

Input buying increased at a slower pace in June reflecting weaker new order growth. At the same time, suppliers' delivery times lengthened again in June.

The degree of optimism among construction companies was the lowest since July 2020. Weaker business confidence has now been recorded over the past five months.

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