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UK housebuilding stalls in March, construction growth moderates: PMI
[LONDON] Growth in construction of new homes in Britain ebbed to its lowest level in three years in March, according to a survey on Monday that showed the overall expansion in the building trade held at its weakest in nearly a year.
The Markit/CIPS UK Construction Purchasing Managers' Index (PMI) held steady at 54.2 in March, matching February's 10-month low and holding a whisker above a consensus forecast for 54.0 in a Reuters poll of economists.
While the pace of growth picked up in commercial property and civil engineering, the PMI's gauge of housing construction activity sank to its lowest level since January 2013, before Britain's economic recovery really started to take hold. "Residential building has seen the greatest loss of momentum through the first quarter of 2016, which is a surprising reversal of fortunes given strong market fundamentals and its clear outperformance over the past three years," Tim Moore, senior economist at survey compiler Markit, said.
Housebuilding is a hot political topic in Britain. Despite government attempts to boost housebuilding, industry bodies and mortgage lenders report demand outstripping supply, pushing up property prices in most of the country.
Markit said that barring a blip the month before last year's national election, overall growth in construction was its weakest since the summer of 2013, with the PMI having sagged almost six points from a recent September peak.
"Heightened uncertainty about the business outlook appears to have weighed on overall construction demand so far in 2016, with survey respondents citing cautious client spending patterns and a reduced willingness to commit to new projects."
A separate survey released on Monday by accountants Deloitte said big British firms were delaying deals and hiring decisions ahead of June's referendum on European Union membership.
Markit did not mention the EU referendum but did say that new construction orders grew at the slowest pace since April last year, while firms hired staff at the weakest rate since June 2013.
A manufacturing sector PMI published last week showed factory growth edged up in March from its weakest rate in nearly three years.