Construction growth ‘weakest in 13 months’

THE UK construction sector saw its weakest level of growth for 13 months in November as a surge in house building cooled further.

A construction site

Figures from the closely watched CIPS/Markit purchasing managers’ index survey gave a reading of 59.4 - where the 50 figure separates growth from contraction.

It was a fall from the previous month’s 61.4 and the lowest since October last year, although it still meant the sector had posted a figure above 50 for 19 months in a row.

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Markit senior economist Tim Moore said: “The construction sector remains a strong growth engine within the UK economy, but momentum has undoubtedly cooled since the summer.”

The figures showed all main areas of construction activity registered weaker growth in November, led by a marked slowdown in civil engineering.

House building was the strongest performing area though its pace of growth slowed for the fourth month in a row to reach its lowest level since October last year. It comes amid signs of cooling in the property market.

The survey found that despite weaker rates of output and new business expansion, there was resilient job creation across the sector, with the pace of employment growth picking up slightly on the previous month.

Construction firms remained highly optimistic about prospects for the year ahead.

But Mr Moore said: “Some construction companies noted that uncertainties ahead of next year’s general election had weighed on business confidence and influenced clients’ willingness to commit to new projects.”

David Noble, chief executive of the Chartered Institute of Procurement and Supply, said the “one dark spot on the horizon” was the danger of prolonged skill shortages across the sector with sub-contractors in high demand and increasingly costly.

Howard Archer, chief UK and European economist at IHS Global Insight, said: “Construction activity appears to have come off its recent boiling point, although it remains relatively hot compared to long-term norms.

“The construction sector should still see appreciable expansion in the fourth quarter, and the outlook still looks relatively bright.

“Meanwhile, prospects still look relatively decent overall for house building even if the growth rate is unlikely to regain the heady levels seen earlier this year.”