Construction Market at Slowest Growth for 22 Months
Posted on: 06/05/2015

This April, the UK construction market has experienced its slowest rate of growth in almost two years.

Research by Markit/CIPS survey of purchasing managers has shown that on account of the general election, many construction firms and clients have delayed in projects and plans due to the impact the election results may have on spending decisions.

Despite the decline in growth, respondents still reported a continued increase in job availability in the sector, but this in the face of worsening capacity pressures.

Residential buildings showed to be the strongest contributor in April to the sector, whereas commercial construction slowed dramatically and civil engineering activity decreased for the first time this year.

Tim Moore, senior economist at Markit, said that despite the slump in growth the survey offers a more optimistic outlook for the UK’s construction than the ONS statistics recently did.

He said: “The uncertain general election outcome appears to have put some grit in the wheels of decision making.

“Construction firms widely noted delays with client’s budget setting and a reduced propensity to commit to new projects.

“Despite experiencing pre-election risk aversion among clients in April, construction companies indicated a strong degree of confidence regarding the year-ahead outlook.

“Taken as a whole, the latest survey presents a far more upbeat picture than the curiously weak official construction output data [by the ONS] for the first quarter of 2015.”

“Not only does [this] survey indicate that output remained in growth territory during April, but the latest data signals ongoing strains on operating capacity.

“Highlighting this, sub-contractor pay rates, a useful bell weather of industry pressures, increased at the fastest pace since the survey began 18 years ago.”

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