UK PMI construction dropped to 48.6 in May, down fro 50.5 and missed expectation of 50.6. That’s also the lowest reading since the snow-related downturn in construction output during March 2018. Additionally, there was the sharpest drop in workforce numbers since November 2012. And commercial work remains the weakest performing category.
Tim Moore, Associate Director at IHS Markit, which compiles the survey:
“May data reveals another setback for the UK construction sector as output and new orders both declined to the greatest extent since the first quarter of 2018. Survey respondents attributed lower workloads to ongoing political and economic uncertainty, which has led to widespread delays with spending decisions and encouraged risk aversion among clients.
“Commercial building remained hardest-hit by Brexit uncertainty, with construction firms reporting the steepest fall in this category of activity since September 2017. Civil engineering work also dried up in May and a fourth consecutive monthly fall in activity marked the longest period of decline since the first half of 2013. Construction companies often commented that recent tender opportunities for civil engineering work had been insufficient to replace completed projects.
“House building was the only sub-category of construction output to buck the downward trend in May, but growth remained softer than on average in 2018.
“The soft patch for construction work so far this year has started to impact on staff hiring, with some firms cutting back on expansion plans and others opting to delay the replacement of voluntary leavers. May data revealed that the latest fall in employment numbers was the steepest for six-and-a-half years. Survey respondents once again noted concerns that the subdued domestic economic outlook and delays related to Brexit uncertainty had curtailed their near-term growth prospects.”
