Growth in Britain's construction industry slowed slightly in March, adding to signs that the economy has lost some of its strong momentum of late last year when it defied the shock of the Brexit vote, according to a new survey.
The Markit/CIPS Construction Purchasing Managers' Index (PMI) dropped back to 52.2 from 52.5 in February.
That was the joint slowest rate of growth since a recent pick-up for the sector began in September and was a touch weaker than the median forecast of 52.4 in a Reuters poll of economists.
The survey showed growth in housebuilding slowed to a seven-month low, more than offsetting the best month so far in 2017 for civil engineering firms who were helped by infrastructure spending. Commercial construction also picked up.
Inflation pressures, which have built since the Brexit vote because of the fall in sterling and higher oil prices, eased. New orders remained at their lowest level since October, in part reflecting concerns about costs among customers, Markit said. But expectations for future business, which hit a 13-month peak in January before falling back in February, rose.
Tim Moore, Senior Economist at IHS Markit, says that builders remain confident, despite signs that growth is weakening: “UK construction firms experienced a growth slowdown in March, with the loss of momentum centred on housebuilding. A weaker trend for residential work has been reported throughout 2017 so far, which provides an indication that the cooling UK housing market has started to act as a drag on the construction sector.
“Civil engineering projects were the construction sector’s main growth engine in March, driven by rising infrastructure spending and a strong pipeline of new work throughout the UK.
“March data showed a slight rebound in commercial construction activity. Survey respondents noted that the resilient economic backdrop and receding Brexit- related anxieties have helped to stabilise client demand after the disruption to development projects last summer."
