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House building growth hits lowest level since March 2018

  • 04/02/2019
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House building growth hits lowest level since March 2018
The UK construction industry took a step back in January with business rising only marginally and at its slowest rate for 10 months.


According to the IHS Markit data, new building orders increased only marginally at the start of 2019, which contributed to the slowest expansion of employment numbers for two-and-a-half years.

All three categories of construction output recorded weaker trends than those reported in December, the research revealed.

Residential work was the strongest performing area, although the latest expansion was modest and the slowest seen since March 2018.

The report noted that Brexit-related anxiety and associated concerns about the domestic economic outlook continued to weigh on client demand.

And while there was still hope for the industry for the rest of the year, this too had been stunted.


House building loses momentum

IHS Markit economics associate director Tim Moore noted that the construction sector had shifted down a gear to start the year.

“Commercial work declined for the first time in 10 months as concerns about the domestic economic outlook continued to hold back activity,” he said.

“The latest survey also revealed a loss of momentum for house building and civil engineering, although these areas of the construction sector at least remained on a modest growth path.

“Staff recruitment slowed to a crawl in January, with construction firms reporting the softest rate of job creation since July 2016.”

He added that delays to client decision-making on new projects in response to Brexit uncertainty was a key source of anxiety. Difficulties converting opportunities to sales were reflected in a slowdown in total new business growth to its lowest rate since last May.


Expectations slip

“Business expectations for the year ahead slipped to a three-month low and remained subdued in comparison to historic trends in January,” Moore continued.

“Positive sentiment towards the outlook for civil engineering work remains a key factor helping to support business sentiment across the construction sector, according to survey respondents.”

Chartered Institute of Procurement and Supply group director Duncan Brock, added: “Residential building, the stalwart of the sector leading the way in the last six months, lost its momentum with the weakest performance since March 2018.”


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