PMI down

Housebuilding slips ahead of steer from Labour

Construction
Housebuilding has slowed ahead of Labour confirming its plans (pic: Terry Murden)

Housebuilders have reduced activity, causing growth to slow in the UK construction industry as developers await direction from the new government.

A downturn in the S&P Global and Chartered Institute of Procurement and Supply construction purchasing managers’ index (PMI) to 52.2 last month from 54.7 the previous month was below City expectations of 54.

Activity in the residential housing sector fell into negative territory, to 47.6 in June. Commercial and civil engineering activity also slipped.

Housebuilders have been promised an overhaul of the planning system and hope to capitalise on Labour’s pledge to build 1.5 million homes over the next parliament.

Andrew Harker, economics director at S&P Global Market Intelligence, said: “While there were signs of a slowdown in the latest survey period, most notably around housing activity, firms indicated that a slowdown in new order growth was in part related to election uncertainty. We may therefore see trends improve once the election period comes to an end.”

There is also some hesitation as the markets await the next move on interest rates, with the Bank of England expected to cut the cost of borrowing in August with inflation now down to its 2% target.



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