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The UK construction sector slipped into decline for the first time in one-and-a-half years in July, with a survey on Thursday showing volumes of residential and civil engineering work weakened.
The latest S&P Global/CIPS UK construction purchasing managers' index tumbled to 48.9 points in July from 52.6 in June. The figure came in below the 50.0 mark, separating growth from decline.
It was the first time the PMI fell below that threshold since January 2021.
‘July data pointed to a reduction in UK construction output for the first time in one-and-a-half years. Lower volumes of residential work and civil engineering activity more than offset a sustained expansion in the commercial segment,’ S&P Global said.
‘July data indicated an overall rise in new orders for the twenty-sixth consecutive month. That said, the latest upturn in new business was notably weaker than seen on average in the first half of 2022. As a result, some construction companies cited a lack of new projects to replace completed contracts.’
Price inflation ‘eased considerably’, with costs rising at the weakest pace since March 2021.
‘Business optimism remained subdued across the construction sector in July, with growth expectations well below those seen in the opening months of 2022. That said, the degree of positive sentiment picked up slightly from June's 23-month low,’ S&P Global added.
The survey features a panel of 150 construction firms in the UK. Responses were collected in the second half of the month.
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