Construction growth drops on General Election uncertainty
Growth in the building sector fell to its slowest pace in almost two years in April, according to an influential study from Markit yesterday.
The purchasing managers’ index fell to 54.2 from 57.8 in March – still firmly above the 50-mark that indicates growth, but a sharp slowdown in the pace of rising output.
The number of new orders slowed particularly quickly, but firms remained upbeat about the longer-term future and continued to hire more staff.
Civil engineering activity dropped for the first time in four months, while residential construction activity increased at its slowest pace in 22 months.
The private sector numbers come after official figures showed that construction output fell in the first quarter.
“The construction slowdown may prove temporary, having been at least in part due to uncertainty and construction project delays in the run-up to the most closely fought General Election in a generation,” said Markit’s chief economist Chris Williamson.
“Encouragingly, companies are expecting business activity to turn higher in coming months, with optimism about the year ahead remaining elevated in April, having climbed to a post-recession high in March.”
It comes amid a range of election promises affecting the property market, including Labour and Lib Dem plans to increase taxes on higher-value homes.