Construction sector growth slows as housebuilding falls
The latest survey of the UK construction sector shows that growth slowed in June after a notable fall in housebuilding output, as firms also reported a slowdown in new orders.
The UK construction sector experienced further growth last month, but the pace of its recovery has slowed down due to a dip in housebuilding.
The latest S&P Global construction purchasing managers' index (PMI) came in at 52.2 in June, down from 54.7 in May. Any score above 50 means things are looking up for the industry, while anything below suggests a downturn.
So, while the sector is still on an upward trajectory, it's not quite hitting the heights predicted by experts, who had forecast a reading of 54. Andrew Harker, economics director at S&P Global Market Intelligence, said: "Continued growth of the UK construction sector in June meant that the sector has recorded sustained expansion throughout the second quarter of the year."
He also said: "We may therefore see trends improve once the election period comes to an end."
The growth in the sector was largely fuelled by commercial construction projects, which saw a significant surge in June.
Civil engineering also witnessed growth, but at a more sluggish pace, according to the survey. Meanwhile, the housing market took a bit of a tumble, with output declining after experiencing its first rise in 19 months back in May.
The research indicated that a rise in new contracts contributed to growth, despite slowing to its lowest point since February. Peter Arnold, EY UK chief economist, noted that the June slowdown was "more significant than those seen in the manufacturing and services sectors".
However, he added: "That said, May's balance had been the highest in two years, and the survey results can be volatile from month-to-month," and "The EY Item Club thinks it would be incorrect to suggest that the June results indicate that a renewed downturn is likely."
