Construction companies in the UK recorded a drop in business activity during November as Brexit uncertainty and the nation’s upcoming general election sent a chill breeze across the sector.
The headline seasonally adjusted IHS Markit/Chartered Institute of Procurement & Supply UK Construction Total Activity Index, which is compiled by IHS Markit from responses to questionnaires sent to purchasing managers at approximately 150 construction companies, rose to 45.3 in November, from 44.2 in October. Readings below 50 signal a contraction within the sector while those above 50 indicate expansion.
Reduced business activity was attributed to a lack of new work to replace completed contracts. In some cases, survey respondents suggested that unusually wet weather in November had also weighed on output.
All three broad areas of construction work recorded a fall in output during November, with civil engineering the worst performing category, followed by commercial building. Meanwhile, a much slower decline in housing activity helped to moderate the overall drop in UK construction output signaled by the survey in November.
Subdued demand for raw materials also led to fewer price rises by suppliers in November, the report stated. The latest data also indicated that overall input cost inflation remained among the lowest seen since early 2016.
“UK construction output fell again in November as Brexit uncertainty and the forthcoming general election continued to send a chill breeze across the sector,” Tim Moore, economics associate director at IHS Markit, said. “The speed of the downturn in construction work eased a little since October, but the survey continues to signal a notable drop-off in business conditions compared with the first half of 2019.”