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News | Published June 05 2019

Fall in employment as construction output shrinks

Output in the construction sector contracted in May, partly as a result of Brexit uncertainty affecting demand.

Employment in the sector also fell at the fastest rate since November 2012.

The Markit/CIPS UK Construction purchasing managers’ index recorded a reading of 48.6 for May, down from 50.5 in April.

Any reading below 50 represents contraction.

The construction sector has contracted three times in the past four months and last month's reading is the lowest since extreme weather bought work to halt in March 2018.

Brexit uncertainty is making clients think twice about spending on major projects and new orders contracted for the second month, hitting a 15-month low.

Tim Moore, an associate director at IHS Markit, said that the soft patch for construction work this year has “started to impact on staff hiring”, with some firms cutting back on expansion plans and others opting to delay the replacement of voluntary leavers.

House building was the only sub-sector where output increased, but this was not enough to compensate for the weakness of commercial and civil engineering work.

Commercial building remained hardest-hit by Brexit uncertainty, with construction firms reporting the steepest fall since September 2017.

Civil engineering work also dried up in May and a fourth consecutive monthly fall in activity marked the longest period of decline since the first half of 2013.

Tim Moore added: “May data reveals another setback for the UK construction sector as output and new orders both declined to the greatest extent since the first quarter of 2018.

“Survey respondents attributed lower workloads to ongoing political and economic uncertainty, which has led to widespread delays with spending decisions and encouraged risk aversion among clients.” 


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Authored by

Joshua Sandiford
Junior Political Editor
@theparlreview
June 05 2019

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