Construction became the second major UK industry to show a lower than expected output in June as Markit’s purchasing managers’ index (PMI) dropped to 54.8 over the month.
The PMI was recorded at 56 during May, which proved itself to become a 17-month high. The recorded value of 54.8 for June is however just below analyst expectations of 55.
For the PMI, any figure below the value of 50 shows a contraction in the sector.
The only other UK major industry that under-delivered was the country’s manufacturing sector. Figures published earlier this week show that it missed its June expectations by two points.
The figures suggest that growth slowed in the housing, commercial and infrastructure sectors in the UK over June, whilst the rise in housing activity still remained strong.
The report suggested that “heightened political and economic uncertainty” created a new risk aversion among clients, whilst also saying that optimism in firms has reached its lowest level since December.
Small construction firms shake off Brexit concerns with confidence
Tim Moore, a senior economist at IHS Markit, commented:
“Fragile business sentiment led to delayed decision-making on large projects and greater concern about the outlook for workloads during the next 12 months.”
“While construction firms remain upbeat overall about their near-term growth prospects, the degree of confidence fell to its lowest so far this year.”
The sector seems to continue its challenge with uncertainty following the EU referendum just over one year ago. One of the biggest worries remains how the country’s exit from the EU will affect the construction sector as it heavily relies on European labour.
