"Heightened uncertainty and subdued general economic conditions in turn contributed to the first outright fall in new work received by construction firms for just over three years".
- David Morrison, SpreadCo
UK construction sector activity in May unexpectedly fell with output growth easing to its weakest for almost three years with new orders contracting for the first time in three years. In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply stated that UK construction PMI index was weaker than expected at 51.2 from 52.0 the previous month and compared with expectations of 51.9 for the month. Construction makes up 6% of Britain's economy, though it accounts for a disproportionate amount of volatility in official gross domestic product data. In addition, the new orders component fell especially sharply, dropping to 48.1 from 50.1, its first time since April 2013 below the 50-mark that separates growth from contraction and the lowest index reading since March 2013.
Uncertainty surrounding the June referendum was again cited as a key factor in restraining activity with over 30% of companies stating that there was a significant negative impact. Civil engineering the worst performing category for the second month running with the residential and commercial sectors also recording activity close to three-year lows. More positively, the employment index remained in positive territory and jobs increased at the fastest pace since January. There was a further deterioration in supplier performance, which continues to suggest capacity constraints, while input prices continued to increase.
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