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The UK construction sector saw its slowest expansion since January in May, figures on Wednesday showed, amid a weaker month for the housing sector as consumer confidence continues to suffer.
The latest S&P Global-CIPS UK construction purchasing managers' index fell to 56.4 points in May from April's tally of 58.2. While still above the 50.0 no change mark, the figure signals the weakest expansion of construction activity in four months.
‘May PMI data signalled another growth slowdown in the construction sector amid a considerable loss of momentum for the residential category. The latest rise in housing activity was the weakest since the recovery began two years ago. Survey respondents suggested the subdued consumer confidence and worries about the economic outlook had constrained demand,’ S&P Global explained.
‘Higher borrowing costs and intense inflationary pressures were also cited as factors likely to hold back growth over the next 12 months. The latest survey data indicated that business activity expectations at construction companies were the least upbeat since August 2020.’
Promisingly, however, some firms noted an improvement in construction item availability, despite ongoing bottlenecks, supplier staff shortages and Brexit trade frictions.
However, cost inflation continued. S&P Global noted 73% of survey respondents reported a rise in purchase prices.
‘This was linked to rising fuel, energy and raw material costs. That said, the overall rate of inflation eased to a three-month low,’ S&P Global said.
The survey features a panel of around 150 construction firms. Responses are collected in the second half of every month.
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