Housing moderates overall decline in UK construction

Posted on: December 3rd, 2019 by PhilM

All sub-sectors of UK construction declined further in November although a slower decline in housing activity moderated the top line PMI reading.

The IHS Markit/CIPS UK Construction Total Activity Index read 45.3, improving from October’s 44.2, but indicating an industry remaining substantially in contraction. Respondents attributed reduced activity to lack of new work to replace completed contracts. Lower sales volumes have now been recorded for eight consecutive months. Continued domestic political uncertainty was cited as the main factor making clients hesitant to commit to new projects. 
Civil engineering continued to fair worst, followed by commercial building. The overall PMI was, however, moderated by a slower decline in housing activity. 
Employment in the construction sector fell in November, with companies reporting they were taking cost cutting action in response to the softer demand. Purchasing activity also declined solidly. Subdued demand held down cost input inflation, which was at one of the lowest levels since early 2016. 

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