Markit/CIPS UK Construction PMI released for March

Construction Industry growth stagnates in March

UK construction growth remained at the same levels as February according to the latest Markit and the Chartered Institute of Purchasing & Supply (CIPS) UK Construction Purchasing Managers’ Index (PMI) figures.

The figures for March saw UK construction’s PMI stay at 54.2, unchanged from the previous month but still above the 50.0 threshold for growth for the 35^th consecutive month.

The growth output is the joint slowest rate since June 2013.

In disappointing news for the government’s ambitious programme of house building, growth in housing was negligible and fell to its lowest level since January 2013. With the demand for housing showing no signs of easing, this is likely to see house prices continue to rise.

The fall in housebuilding was offset by increases in growth in both commercial property and civil engineering sectors.

Tim Moore, Senior Economist at Markit said: “March’s survey confirms that the UK construction sector is experiencing its weakest growth phase since the summer of 2013. Residential building has seen the greatest loss of momentum through the first quarter of 2016, which is a surprising reversal of fortunes given strong market fundamentals and its clear outperformance over the past three years.

“Construction firms were reliant on a rebound in commercial building and resurgent civil engineering growth to offset the slowdown in housing activity. Civil engineering delivered its strongest performance for just over a year, suggesting that a healthy pipeline of infrastructure projects continues to boost construction output.

“However, heightened uncertainty about the business outlook appears to have weighed on overall construction demand so far in 2016, with survey respondents citing cautious client spending patterns and a reduced willingness to commit to new projects.

“As a result, volumes of new work disappointed in March as order book growth slipped for the third month in a row and reached its weakest since the pre-election blip last year.”

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