Buyers report sharpest decline in activity since March 2018 - Construction Manager

Construction buyers have reported the sharpest fall in construction output since March 2018, as lower volumes of commercial and civil engineering work offset a modest increase in house building. That’s according to the latest IHS Markit/CIPS UK Construction Activity Index, which reported a score of 48.6 in May, down from 50.5 in April, where anything below 50.0 represents a fall in activity. It is the lowest reading since the snow-related downturn in construction output during March 2018.

Phil Harris, director at BLP Insurance, said there were positives beyond the Brexit uncertainty: “Despite last month’s bounce back into expansion territory, it was unsurprising to see a significant drop in today’s PMI figures under a cloud of continued political turmoil.

“Nevertheless, market fundamentals continue to remain positive. The planning pipeline for the residential sector is healthy, and a promising year-on-year boost in value (over 25%) for onsite office projects in the past few months could be a long-awaited inflexion point in the three-year commercial lull.

“Build to Rent (BTR) also continues to flourish. Significant deals this month totalling £190m are a shot in the arm for the modular construction sector and will bring a needed investment boost to the UK BTR market and welcome offsite expertise from abroad.”

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