UK construction activity continued to increase in September but the rate of growth was the slowest in six months.
That’s according to the latest IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI), which surveys UK construction buyers.
The PMI posted a score of 52.1 in September, down from 52.9 in August.
Civil engineering was the worst-performing sub-category of construction work with activity declining at a slightly quicker rate in September.
But house building and commercial construction continued at a “solid” pace, albeit at a slightly weather rate of growth than in August.
Meanwhile the rate of new order growth picked up to its strongest level since December 2016, which companies attributed to resilient demand and an upturn in new invitations to tender.
Staffing numbers also rose in September, helped by the improvement to order books. The latest increase in employment was the fastest since December 2015, while subcontractor usage also increased at the fastest pace for over two and a half years.
The index also found that respondents’ company payrolls had been boosted by a larger-than-usual intake of trainees and apprentices during the month.
Delivery times lengthen
But delivery times for construction products and materials continued to lengthen, with “intense supply chain pressures” attributed to stock shortages at vendors and stretched transportation capacity.
The overall rate of input price inflation was also the fastest for three months, while there was a further decline in optimism among respondents about the business outlook for the year ahead.
Companies noted that political uncertainty and investor concerns about Brexit had dampened confidence in September.
Tim Moore, associate director at IHS Markit and author of the IHS Markit/CIPS Construction PMI said: “UK construction firms experienced softer output growth during September, with house building, commercial and civil engineering all losing momentum.
“A lack of new work to replace completed projects meant that civil engineering saw an overall decline in activity for the second month running and remained the main laggard.
“There were mixed signals in terms of the near-term outlook. New order books strengthened to the greatest extent since December 2016, which indicates that construction workloads remain on an upward trajectory. Rising demand and tight labour market conditions led to robust job creation, with survey respondents commenting on a larger-than-usual uptake of apprentices in September.
“However, latest data showed that overall confidence about the year-ahead business outlook was among the lowest seen since the start of 2013. Construction companies continued to note that political uncertainty acted a key drag on decision-making, with Brexit worries encouraging a wait-and-see approach to spending among clients. The main areas reported as likely to see a boost in the coming year were construction work related to large-scale energy and transport projects.”
