Construction PMI hits new low with building on hold until after EU vote
Another PMI. Another disappointing score. Another sign that the UK economy is slowing down.
This morning it was the turn of the construction industry to post the latest weak score on the purchasing managers' index (PMI), as the industry experienced the first fall in new orders in three years and edged dangerously close to slowdown territory.
Construction came in at 51.2 on the index, compiled by Markit and the Chartered Institute for Procurement and Supply (CIPS), down from 52 last month and its lowest reading since June 2013. Scores below 50 indicate an industry in contraction.
"The latest reading signalled the weakest overall rise in business activity for almost three years," Markit said.
| Sector | April PMI | May PMI |
| Manufacturing | 49.2 | 50.1 |
| Construction | 52.0 | 51.2 |
| Services | 52.3 | Published tomorrow |
"Construction companies are facing a challenging second quarter … the forthcoming EU referendum has disrupted new order flows and the timing of client decision making in particular," said Tim Moore a senior economist at Markit.
Despite the poor headline figures, construction firms remain relatively upbeat about the next 12 months, with 51 per cent of businesses expecting work to pick up and just 14 per cent preparing for a fall.
The figures follow yesterday's manufacturing PMI which came in just above 50 after posting a score of 49.2 in April. Nevertheless, economists said it would not be enough to arrest the industry's broader decline.
With construction and manufacturing near flat-lining, all eyes will be on tomorrow's services scores, with the industry, yet again, being relied on to do the heavy-lifting for the UK economy.