- Samuel Tombs, Pantheon.
The Purchasing Managers' Index for the UK construction sector marked slower growth in June, missing analysts' expectations. IHS Markit reported on Tuesday that the British Construction PMI came in at a seasonally adjusted 54.8 in the reported month, falling from a 17-month high of 56.0 registered in May. Meanwhile, analysts anticipated a smaller decline to 55.0. The report emphasized that the retreat was mainly driven by weaker increases in employment and new orders. Moreover, demand for construction services became weaker due to political pressures and the uncertain economic outlook, while business sentiment within the sector fell to the lowest level of this year. Contraction was registered in all three of the major areas, including commercial and civil engineering as well as house building. Nevertheless, construction firms remained positive on the short-term growth prospects. Overall, a higher pressure on costs, skill shortages and insufficiently fast delivery times were expected to slow the British construction sector's growth. In addition, companies dependent on the European labour market are likely to be hit by the Brexit.
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