The UK construction sector continued to expand at a subdued pace as fragile business sentiment and political uncertainty hinder client demand, survey data from IHS Markit showed Friday.
The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers’ Index rose to 51.4 in February from a 4-month low of 50.2 in January. A score above 50 suggests growth in the sector.
The reading was above the expected level of 50.5. Nonetheless, the score signaled a marginal increase in construction output in February.
Civil engineering was the worst performing category of construction work with activity declining at the sharpest pace for five months. At the same time, a soft patch for house building continued in February.
Meanwhile, the bright spot was a solid upturn in commercial construction that expanded at the fastest pace since May 2017.
Data showed that new business volume growth was slightly slower than seen at the start of the year. Weak business activity growth and lower new order volumes both weighed on input buying in February.
Input cost inflation remained strong in February, driven by higher prices paid for a range of raw materials. However, the rate of input price inflation was much softer than the five-and-a-half year peak seen at the start of 2017.
Construction companies indicated that business confidence moderated since January and was at one of the lowest levels seen in the past five years.
Tim Moore, an associate director at IHS Markit, said “Despite pockets of resilience in the UK construction sector, there was little sign of an imminent turnaround in overall growth momentum.”
Even though the economy is expected to hold up well in 2018, a significant turnaround in construction activity also seems unlikely, Eduardo Gorab, an economist at Capital Economics, said.
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