Growth slows in construction sector amid housebuilding fall

The UK construction sector grew further last month but its recovery lost some momentum due to a slump in housebuilding.

Firms also reported a slower rise in new orders, with some blaming uncertainty in the run-up to the General Election.

The latest S&P Global construction purchasing managers’ index (PMI) scored 52.2 in June, down from 54.7 in May.

Any score above the 50.0 threshold indicates that activity in the industry is increasing, while anything below means it is shrinking.

The sector was therefore still growing but was also notably weaker than the 54 reading predicted by a consensus of analysts.

Expansion

Andrew Harker, economics director at S&P Global Market Intelligence, said: “Continued growth of the UK construction sector in June meant that the sector has recorded sustained expansion throughout the second quarter of the year.

“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.”

Growth across the sector was driven by commercial construction work, which increased “markedly” in June.

Civil Engineering saw growth but at slower rate, according to the survey.

Meanwhile, housing saw a decline after output dropped back following its first rise for 19 months in May.

The research suggested that another increase in new contracts helped to drive growth, although it nevertheless slowed to its lowest level since February.