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UK construction activity steady in May

U.K. construction activity held steady in May, but growth remained subdued as new order books notched a fourth month of decline, IHS Markit and the Chartered Institute of Procurement said.

The IHS Markit/CIPS UK Construction Purchasing Managers' Index came in at 52.5 in May, unchanged from April, when the measure rebounded following severe weather disruptions.

Commercial work growth accelerated to a three-month high in May, and residential and civil engineering activity also expanded.

New order books fell for the fourth time this year as general uncertainty in the sector weighed on clients' willingness to spend.

"[A]ctivity in May was once again buoyed by some firms still catching up from disruptions caused by the unusually poor weather conditions in March, and a renewed drop in new work hinted that the recovery could prove short-lived," IHS Markit economist Sam Teague said.

Business optimism toward growth prospects eased to a seven-month low amid fears of political and economic uncertainty and an expected slowdown in the construction sector, the report said.

The rate of input price inflation was the steepest in three months in May, with respondents attributing increased purchasing costs to higher fuel, plastic and steel-related input prices.

"With new order books deteriorating and cost pressures picking back up, it's not surprising to see construction firms taking a dimmer view of prospects and pulling-back on hiring, all of which makes for a shaky-looking outlook," Teague said.