UK construction slows more than expected in April

The pace of UK construction slowed more than expected in April, data released on Wednesday showed.

The Markit/CIPS UK construction purchasing managers’ index fell to 52.0, down from 54.2 in March and missing expectations for a reading of 54.0.

Although it was still above the 50.0 mark that separates contraction from expansion, it pointed to the slowest expansion of business activity since mid-2013.

Tim Moore, senior economist at Markit, said: “UK construction firms reported their worst month for almost three years in April, meaning that the first quarter slowdown is unlikely to prove temporary.

“Stalling new order volumes not only set the scene for further weakness ahead, but are already weighing on staff hiring and input buying across the construction sector.

“Softer growth forecasts for the UK economy alongside uncertainty ahead of the EU referendum appear to have provided reasons for clients to delay major spending decisions until the fog has lifted.”

David Morrison, senior market strategist at SpreadCo, said: “There will be precious little chance of the BoE considering a rate hike this year until there’s a definite improvement in the trend for these numbers.

“It’s also worth noting that so far this week we’ve had poor manufacturing PMIs from the US and China, while data from across the Eurozone was mixed. Add in last week’s disappointing US GDP number and yet another dismal corporate earnings season and global equities could be in for a difficult month.”