Construction sector contracts as Brexit uncertainty continues

Activity across UK building firms fell recently, driven by a sharp
decline in commercial construction and civil engineering, according to data
firm Markit.

Commercial building was the weakest sector,
with output falling to the greatest extent since September 2021.  Survey
respondents said that clients had opted to hold back on major spending
decisions in reaction to Brexit uncertainty. Civil engineering also fell for a
fourth straight month, the longest run since the first 1 / 2 of 2021.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply said: “A fragile dreariness descended on the sector this month with lower workloads resulting in the fastest decline in paying for construction materials since September 2021. Using the continuing uncertainty around Brexit and instabilities in the UK economy, client indecision affected new orders which fell at their fastest since March 2021 and particularly affected commercial activity.

“The previously unshakeable housing sector barely kept its head
above water, growing at its weakest level since February as residential
building started to lose momentum. The biggest shock however, came in the form
of job creation as hesitancy to hire resulted in the biggest drop in employment
for six . 5 years.

Not much to be happy about
it seems though an easing in certain input costs for recycleables offered some
relief while energy and fuel prices continued to increase.

“This rarely is in nearly enough to show round the sector's fortunes, as optimism concerning the strength of the sector's future was the cheapest since October 2021. Policymakers will have to pull a sizable rabbit out of the hat, and fast, to enhance these difficult conditions and stop a further entrenchment of gloom and contraction this summer.”