An “intense headwind” from Brexit helped to send UK construction activity to a three-month low in December, according to the latest survey snapshot of the sector.
The Purchasing Managers’ Index (PMI) last month came in at 52.8, down from 53.4 in November and the weakest since September. Any figure above 50 indicates growth from the previous month.
Civil engineering rebounded in December, but housebuilding and commercial construction both decelerated.
“Subdued domestic economic conditions and an intense headwind from political uncertainty resulted in the weakest upturn in commercial work for seven months,” said Tim Moore of IHS Markit, which compiles the PMI survey.
“With a slight rise in new orders and a softening in overall activity growth, firms continued to be affected by Brexit-related uncertainty and reluctance by clients to place orders, especially for commercial projects,” said Duncan Brock of the Chartered Institute of Procurement & Supply.
Construction accounts for around 6 per cent of UK GDP.
The most recent official data showed that the sector surged by 2.3 per cent in the third quarter of 2018, although this was partly catch-up growth after heavy snowfall earlier in the year hit activity.
“On past form, the average level of the PMI in Q4 is consistent with output merely remaining at Q3’s level,” said Samuel Tombs of research firm Pantheon.
Research from the Construction Industry Training Board released last year suggested a third of UK construction firms are already feeling the effects of Brexit.
Almost half the employers in the sector are concerned that recruitment will become harder over the next two years.
According to the latest PMI survey, subdued demand conditions were the main factor behind disappointing construction output growth in December, but there were also some reports that wet weather had held back work.
