British builders are losing steam as housebuilding work slows and Brexit looms closer, the latest snapshot of the sector revealed on Thursday.
While manufacturers managed stronger growth last month, that was largely due to firms stockpiling as they prepared for a potentially disastrous “No Deal”. Builders got no such lift today in a sluggish December and the IHS Markit.Chartered Institute of Purchasing & Supply activity index — a closely watched indicator —fell from 53.4 in November to 52.8 last month.
While that shows a sector that is still growing — any number above 50 indicates expansion — it was the slowest pace of expansion since September.
Tim Moore at IHS Markit said: “UK construction firms signalled a slowdown in housing and commercial activity growth in December, which more than offset a strong performance for civil engineering at the end of 2018. Subdued domestic economic conditions and an intense headwind from political uncertainty resulted in the weakest upturn in commercial work for seven months.”
Brexit-related concerns over supply chains have eased somewhat, but businesses are far from confident. Moore added: “Levels of optimism remained subdued, largely reflecting concerns that Brexit uncertainty will continue to encourage delays with decision-making, especially on commercial projects.”
While some heralded yesterday’s news of better than expected manufacturing figures, most warned that the boost was likely to be short-lived.
The news could get worse tomorrow, when the latest update from the all- important services sector of the economy emerges. Services are more than three-quarters of UK economic output but the British Chambers of Commerce’s latest survey showed the weakest growth from the sector in two years.
The Bank of England is meanwhile seen as unlikely to move on interest rates again before May at the earliest, assuming the UK manages an orderly exit from the EU.
