UK Construction Sector Moves Back into Reverse Gear During September

Key findings:

  • Business activity falls for first time in 13 months
  • Sharpest drop in civil engineering work since April 2013
  • New orders and input buying drop in September

Summary: September data revealed a difficult month for the UK construction sector, as a sustained drop in new work led to the first reduction in overall business activity since August 2016. Survey respondents attributed the drop in workloads to fragile confidence and subdued risk appetite among clients, especially in the commercial building sector. The seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI® ) registered 48.1 in September, down from 51.1 in August and below the crucial 50.0 no-change threshold for the first time in 13 months. The latest reading signalled the fastest decline in overall construction output since July 2016. Lower volumes of construction work reflected marked falls in both commercial and civil engineering activity during September. The reduction in civil engineering work was the steepest for almost four-and-a-half years, which some firms linked to a lack of new infrastructure projects to replace completed contracts

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.