Confidence in the construction sector falls after the UK construction Markit/CIPS Purchasing Managers’ Index® (PMI®) reading dropped from 54.0 to 53.6.
The main reason for the slump was a lower rise in activity which created a slowdown in business growth. Also employment levels decreased at the fastest level since January.
David Noble, CEO of CIPS said, “Growth in the UK construction sector was broadly unchanged in June, despite reaching a milestone sixth month of expansion. Optimism about increases in activity was stifled by concern over the overall health of the economy and the level of both public and private sector spending.
“Civil engineering activity had a slight reprieve after a notable contraction in May, but commercial activity – still the strongest area of growth – slowed somewhat. Meanwhile a reduction in residential construction was recorded, unsurprising given reports of sliding house prices. However, this was modest with almost three quarters of firms reporting no change.
“A solid reduction in employment indicated that firms are meticulously managing their costs, and prospects for any future expansions in output growth look moderate at best with confidence weakening.”