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‘Stuck in the ice age’: Construction industry jobs fall at fastest rate in six years

Kier Group has suffered a year of financial worries
Kier Group has suffered a year of financial worries

Britain’s construction industry suffered yet another blow in May, as the sector lost workers at the fastest rate since 2012.

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The sector remains in the grip of Brexit uncertainty, analysts warned this morning. This has reduced workloads and made firms reticent to replace departing staff, according to a closely-followed measure of industry activity.

Overall construction activity also dipped last month. Commercial and civil engineering workloads fell, while house building continued its trend of propping up the industry. IHS Markit’s Purchasing Managers’ Index (PMI) fell to 48.6 in May, the lowest reading since March 2018.

Last month the survey came in at 50.5. A score of more than 50 indicates growth, while below indicates contraction.

“The biggest shock came in the form of job creation as hesitancy to hire resulted in the largest drop in employment for six and a half years,” said Chartered Institute of Procurement & Supply director Duncan Brock.

KPMG head of construction Jonathan White said the result was “symptomatic of the cloud of uncertainty currently enveloping the sector.

“The steady stream of infrastructure work across the UK had strengthened order books – and buoyed confidence.

“But there is a clear sense that the market is slowing down in the commercial sector as the Brexit impasse puts a halt on decision-making.”

Commercial building was the weakest sector, with output falling to the greatest extent since September 2017.  Survey respondents said that clients had opted to hold back on major spending decisions in response to Brexit uncertainty. Civil engineering also fell for a fourth straight month, the longest run since the first half of 2013.

Naismiths managing director Blane Perrotton said: “Apart from a brief flurry of stockpiling in advance of 29 March – what should have been Brexit Day – many in the industry have had a pretty wretched start to the year.

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“There is precious little to cheer in this altogether bleak PMI report. Despite some green shoots elsewhere in the economy, on this evidence the climate in the construction industry remains stuck in the Ice Age.”