The PMI index slowed for the third time in the past five months, coming in at 52.3 points, significantly worse than 53.5 points expected and lower than 53.7 in March. The figure is also markedly below the 55.2 reading the index has averaged since its inception two decades ago, although the current 40-month sequence of continued growth is the second-longest registered since records began in 1996. Although new business growth picked up slightly, it remained relatively subdued and business optimism was the joint-weakest in over three years. The latest reading is consistent with a near-stalling of economic growth, down to just 0.1 per cent in April. But it has been showing signs of slowing since late past year, hurt by a weakening global economy and by uncertainty about the country’s European Union future.
Advertisement
The loss of momentum across the sector has been reflected by stagnating levels of new business volumes in April.
Construction firms also signalled a renewed decline in confidence about the year-ahead business outlook in April, resuming the general downward trend seen since June 2015.
Bole said suppliers are cutting delivery times for the first time in three years, while manufacturers are depleting their stocks and cutting the amount of raw materials they buy from suppliers. Some firms commented on softer demand for raw materials.
Among the three broad areas of construction activity, commercial building was the strongest performing category during April.
It said 20,000 posts were cut over the last three months, with bosses highlighting deteriorating exports, weaker domestic demand and retail uncertainty, including woes at BHS and Austin Reed, for the despair.
“At the other end of the supply chain, the National Living Wage has compounded cost increases, resulting in the overall rate of input price inflation hitting a 27-month high”.
Fresh concerns broke out over Britain’s lacklustre manufacturing sector oday as a respected survey showed it was running at its lowest ebb in more than three years.
David Noble, chief executive of the Chartered Institute of Procurement & Supply, said: “Although UK construction grew marginally in April, clouds of uncertainty are hovering overhead, depressing the industry’s outlook”.
Advertisement
David Noble, group chief executive at CIPS, added: “Fears over weaker United Kingdom and global economic growth dealt a blow to confidence in the construction sector, leading to delays in new spending commitments”.
