UK construction activity growth unchanged in March, survey reveals

UK construction activity growth held steady in March as new business expansion moderated, a survey revealed on Monday.

The Markit/CIPS purchasing managers’ index remained at 54.2, above the 50 level that separates an expansion from a contraction for the 35th consecutive month. Analysts had expected a reading of 54.1.

The reading marked the slowest rate of output growth since June 2013. The report said incoming new work continued to act as a brake on construction output in March.

Tim Moore, senior economist at Markit, said survey respondents cited cautious client spending patterns and a reduced willingness to commit to new projects as heightened uncertainty about the business outlook has weighed on overall construction demand so far in 2016.

Job creation also slowed in March and sub-contractor usage fell for the second month in a row.

“Residential building has seen the greatest loss of momentum through the first quarter of 2016, which is a surprising reversal of fortunes given strong market fundamentals and its clear outperformance over the past three years,” Moore said.

“Construction firms were reliant on a rebound in commercial building and resurgent civil engineering growth to offset the slowdown in housing activity. Civil engineering delivered its strongest performance for just over a year, suggesting that a healthy pipeline of infrastructure projects continues to boost construction output.”