Monthly output bulletin has now stayed below crucal 50 mark for nearly two years
The ongoing housing slump saw a bellwether index remain in the red for the 20th successive month as output fell back in August from a mini recovery in July.
The S&P Global UK Construction Purchasing Managers’ Index had jumped to 44.7 in July from 38.4 in June sparking hopes a corner had been turned.
But the latest figures from the PMI this morning showed the headline figure fell back to 44.3 in August with residential registering a score of 37.6 – down from the 41.8 it posted in July.
There was better news in the other two sectors covered with commercial activity (47.8) falling at the slowest rate since January, while civil engineering activity (40.5) decreased to the least marked extent since March.
S&P’s economics director Tim Moore said: “A faster downturn in house building [was] the main reason for a weaker overall performance during August.
“Sluggish demand conditions and low client confidence, combined with anxiety about the impact of the Middle East conflict, were again factors contributing to lower workloads across the construction sector.”
He said that geopolitical tensions, lacklustre domestic economic prospects and higher borrowing costs were all cited as reasons for fragile confidence, although Moore added input inflation was at its lowest since February while job cuts were also at their lowest since February.
Atul Kariya, head of real estate and construction at advisory firm MHA, said: “For now, the sector is doing little more than treading water. The fundamentals have not changed. Demand is weak, costs remain high, planning is still too slow, and confidence is being held back by uncertainty.”
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