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Growth in the UK construction sector slowed faster than expected last month, according to survey data, led by falling housing activity.
The S&P Global/CIPS UK construction purchasing managers’ index fell to 50.7 points in March from 54.6 in February.
Falling closer towards the 50-point mark that separates expansion from contraction, it shows growth slowed down during the month.
The slowdown was faster than the market had expected, with FXStreet-cited consensus anticipating a reading of 53.5.
‘UK construction companies experienced a sustained rebound in output levels during March as work on civil engineering and commercial projects picked up for the second month running. Improved tender opportunities were also reflected in an upturn in new orders since February and the strongest rate of job creation for five months,’ commented Tim Moore, S&P Global economics director.
However, the ‘sharp and accelerated’ decline in house building was the ‘main area of concern’, Moore said.
‘Cutbacks to new residential projects in the wake of subdued demand and rising interest rates contributed to the sharpest fall in housing activity across the construction sector for almost three years,’ he explained.
Nevertheless, growth projections were lifted by the fastest improvement in suppliers’ delivery times in over a decade. Construction firms reported easier access to inputs, with hopes purchasing price pressures would ease in the coming months.
‘Despite worries about the near-term outlook for housing activity, expectations for total construction output during the year ahead were relatively upbeat in March,’ Moore concluded.
The UK construction PMI is compiled by S&P Global from responses to surveys sent to around 150 UK construction firms, with data collected between March 10 and 30.
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