close
close

Construction growth slows as builders adopt wait-and-see attitude ahead of elections

  • S&P Global UK’s Purchasing Managers’ Index for the construction industry fell to 52.2 in June

Growth in the UK construction industry slowed in June as building activity declined, according to a closely watched survey.

S&P Global UK’s construction purchasing managers’ index fell to 52.2 in June from 54.7 in May. A reading of 50 or higher indicates growth.

The only category to see a decline in activity was residential construction, where output fell “significantly” in May after its first increase in 19 months.

The survey showed a decline in new orders as some companies adopted a wait-and-see attitude ahead of the general elections.

Construction growth slows as builders adopt wait-and-see attitude ahead of elections

Construction: UK construction growth slowed in June, new data shows

Andrew Harker, director of economics at S&P Global Market Intelligence, said: “While there were signs of a slowdown in the most recent survey period, particularly in residential construction activity, firms said a slowdown in new orders growth was partly due to election uncertainty.”

He added: “It is therefore possible that trends will improve once the election period comes to an end.”

The broader all-sector PMI, which includes results from the larger services and manufacturing sectors and was released earlier this week, fell to 52.3 from 53.1 in May, reflecting slower growth in the services sector.

In the construction sector, new orders continued to rise, but the increase was the lowest since February, S&P said.

While activity in commercial construction and civil engineering increased, Thursday’s survey showed a further decline in residential construction activity.

Companies reported an increase in employment; the number of new jobs created was the highest since August last year.

On inflation, Harker said: “On the inflation front, there continues to be little sign of cost pressures increasing to any great extent that would encourage companies to increase their purchasing activities. Supply chain conditions also remain favourable.”

The Bank of England, which left its base rate at a 16-year high of 5.25 percent last month, is closely monitoring wage growth and services costs as it considers cutting its base rate this year.

According to S&P, the costs of some raw materials rose slightly last month, but pressure on supply chains has eased.

DIY INVESTMENT PLATFORMS

Easy investing and ready-made portfolios

AJ Bell

Easy investing and ready-made portfolios

AJ Bell

Easy investing and ready-made portfolios

Free fund trading and investment ideas

Hargreaves Lansdown

Free fund trading and investment ideas

Hargreaves Lansdown

Free fund trading and investment ideas

Flat fee for investments from £4.99 per month

interactive investor

Flat fee for investments from £4.99 per month

interactive investor

Flat rate investments from £4.99 per month

Stock investment: 30+ million community

eToro

Stock investment: 30+ million community

eToro

Stock investment: 30+ million community

Free stock trading and no account fees

Trade 212

Free stock trading and no account fees

Trade 212

Free stock trading and no account fees

Affiliate links: If you purchase a product, This is Money may receive a commission. These offers are selected by our editorial team because we think they are particularly worth mentioning. Our editorial independence is not affected by this.

Compare the best investment account for you