The shrinking UK construction sector
Latest statistics show that the UK commercial construction sector contracted again in March 2019.
Continued economic uncertainty has made businesses unwilling to commit to new projects, according to a survey recently released by IHS Markit and the Chartered Institute of Purchasing and Supply (CIPS).
The construction purchasing managers’ index (PMI) was 49.7 in March, up from 49.5 in February (a score of under 50 marks a contraction). It was the first back-to-back contraction since August 2016 reflecting a period of ‘subdued underlying demand’.
Commercial construction – building for the private sector – performed worst with survey respondents citing Brexit uncertainty and a lack of confidence in the domestic economy as the reasons businesses have stopped spending on new facilities. Furthermore the long time frames involved in planning and construction of commercial buildings has meant more consideration being given to long term economic forecasts before work is even commissioned. The continuing economic uncertainty has resulted in many projects being delayed. In addition, the sector reports strong competition for the contracts that are available.