(Alliance News) - Activity in the UK construction sector unexpectedly slowed in August as companies pointed to a shortage of new work, IHS Markit said on Friday.
The seasonally adjusted IHS Markit/CIPS UK construction purchasing managers' index registered 54.6 in August, down, from 58.1 in July. The reading missed the consensus estimate, cited by FXStreet, of 58.5.
Still, the score remained above the 50.0 mark which separates expansion from contraction.
Markit said the August data pointed to a setback for the recovery in UK construction output, with growth easing from the near five-year high seen during July. Survey respondents mostly suggested that a lack of new work to replace completed projects had acted as a brake on the speed of expansion.
Further, Markit said total new business volumes increased for the third month running during August, but the rate of expansion remained only modest and slowed since July. Construction companies noted that economic uncertainty and a "wait-and-see approach" among clients had limited their opportunities to secure new work, Markit added.
Markit economics director Tim Moore said: "The latest PMI data signalled a setback for the UK construction sector as the speed of recovery lost momentum for the first time since the reopening phase began in May. Housebuilding remained the best performing area of construction activity, with strong growth helping to offset some of the weakness seen in commercial work and civil engineering activity.
"The main reason for the slowdown in total construction output growth was a reduced degree of catch-up on delayed projects and subsequent shortages of new work to replace completed contracts in August. Another month of widespread job shedding highlighted the ongoing difficulties faced by UK construction companies, with order books often depleted due to a slump in demand from sectors of the economy that have experienced the greatest impact from the pandemic."
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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