Despite modest recovery, brexit worries weigh high for UK builders
Despite a modest recovery from a hit since the beginning of 2018, brexit worries weigh high for UK builders
UK builders have maintained modest recovery from a hit since the beginning of 2018, but brexit is causing concerns, a survey showed on Monday.
Britain’s construction industry maintained its modest recovery in May which was hit during the snowy start to 2018, but worries about Brexit were causing some projects to be put on hold, according to CIPS UK Construction Purchasing Managers’ Index (PMI).
The IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) was held at 52.5, unchanged from April’s modest growth rate after a sharp contraction in March. That was above the median forecast of 51.9 according to a poll. This added to other signs that Britain’s overall economy was picking up after a January-March slump.
The Bank of England is looking for signs that the near-stagnation of Britain’s economy in early 2018 was only temporary before it resumes its plan to gradually raise interest rates.
An economist at IHS Markit, Sam Teague said that activity in May was once again buoyed by some firms still catching up from disruptions caused by the unusually poor weather conditions in March. A renewed drop in new work hinted that the recovery could prove short-lived.
New order books shrank for the fourth time in five months with companies blaming political and economic uncertainty ahead of Britain’s departure from the European Union in March next year. Optimism about growth prospects fell to a seven-month low. Higher fuel and steel prices pushed up input costs causing further concern among construction firms.
Construction accounts for only around 6 per cent of British economic output.
A PMI survey covering Britain’s manufacturers, which was published on Friday, showed growth in the factory sector picked up in May but showed signs of weakness ahead.
The PMI for the much larger services sector is due on Tuesday.