UK construction sector only 'treading water' in April, according to latest survey
Analysts described the rebound in the Purchasing Managers' Index after March's snow disruption as underwhelming
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Your support makes all the difference.The UK’s builders were only “treading water at best” in April, according to the latest survey snapshot of the sector.
The Purchasing Managers’ Index (PMI) went back into positive territory in the month with a reading of 52.5, up from 47 in March, a 20-month low, when snow massively disrupted activity.
But analysts described the rebound as underwhelming, with new work rising only marginally
The survey cited reports from builders of “heightened economic uncertainty and subdued confidence among clients”.
“The recovery from March’s low point is somewhat underwhelming and provides an indication that the construction sector has been treading water at the very best in recent months,” said Tim Moore of IHS Markit, which compiles the survey.
Official data released last month suggested that output from the construction sector, which accounts for around 6 per cent of the overall economy, slumped by 3.3 per cent in the three months to March.
Total GDP rose by just 0.1 per cent, the weakest rate of expansion in more than five years.
Underwhelming bounceback
The data prompted a sharp sell-off of sterling, as many traders bet that the weak figures would deter the Bank of England from raising interest rates again later this month.
The Office for National Statistics said that the bad weather in February and March had impacted construction and retail sales, but that the overall economic affect was “limited”.
In April, all three construction sectors – house building, commercial and civil engineering – returned to positive territory according to the PMI, with the largest rebound seen in housebuilding.
“The long investment time horizons for both commercial and civil engineering projects mean that both sectors likely will remain depressed until some clarity emerges over the UK’s long-term relationship with the EU,” said Samuel Tombs of Pantheon.
The latest PMI for manufacturing, released on Tuesday, showed that the weakness of the UK’s manufacturing sector continued into the second quarter of 2018.
The April PMI for the UK’s dominant services sector will be released on Thursday.
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