trending Market Intelligence /marketintelligence/en/news-insights/trending/6yshnzdjmeweeg-ys7mdzg2 content esgSubNav
In This List

UK construction sector growth nears stagnation in January

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


UK construction sector growth nears stagnation in January

U.K. construction sector growth slowed to near-stagnation in January as house building activity fell and new orders contracted, data from the IHS Markit/Chartered Institute of Procurement & Supply showed.

The seasonally adjusted construction purchasing managers' index fell to 50.2 in January from 52.2 in December 2017, barely above the 50.0 no-change threshold. The January figure signaled the weakest growth in four months.

Commercial building registered marginal growth after six months of decline. Civil engineering activity also saw modest growth, representing an improvement on the declines seen late last year. Sub-contractor usage grew in January, bidding farewell to a 10-month sequence of decline, though sub-contractor availability fell sharply in the month.

Residential building ended a 16-month expansion period. Reduced growth in building activity weighed on the rate of job creation which eased to an 18-month low in January.

New orders received by U.K. construction companies fell slightly for the first time in four months, linked to market uncertainty by survey respondents. However, business optimism improved in January as many construction companies anticipate an increase in new business wins later in 2018.

"Despite the upturn, optimism remains worryingly low by historical standards," Sam Teague, economist at IHS Markit and author of the IHS Markit/CIPS construction PMI.

Cost pressures remained intense in January for the U.K. construction sector, with input costs rising due to various materials.

"With construction teetering on the edge of contraction, this surprise outcome will serve as a jolt to policymakers, that the impact of political and economic uncertainty remains large at the beginning of 2018," CIPS Customer Relationships Director Duncan Brock said.