British construction slows for second consecutive month – IHS Markit

By David Milliken

LONDON (Reuters) – British construction activity slowed slightly in March, as companies continue to postpone major construction projects due to Brexit-related uncertainty, a survey said on Tuesday. from the industry.

The IMI index of purchasing managers IHS Markit / CIPS rose slightly from 49.5 to 49.7, but remained below the 50 mark that divides contraction growth, which is the first Consecutive decline in production since August 2016, just after Britain voted to leave the European Union.

Housing construction continued to show moderate growth, but civil engineering fell and commercial projects – such as new stores, factories or warehouses – fell at the fastest pace since September 2017.

"The Brexit uncertainties continued to generate indecision, eventually reaching order book volumes," said Joe Hayes, an economist at IHS Markit, who compiles the survey.

Official data from last week show that production in construction rose only 0.3% in 2018, the lowest of the last six years.

Although new orders rose slightly faster in March, they were below their long-term average and construction companies reported tougher competition than usual, said IHS Markit.

Manufacturers also reported increased delays in supply due to low inventories and increased supplier capacity, while raw material costs increased at a record pace in four months due to the weakness of the currency and some shortages.

The investigation had already shown delays in building materials in February, when the construction industry criticized a lack of transport capacity due to an increase in pre-Brexit inventories by manufacturers who were relying on imports from the EU.

The March survey of manufacturers, released Monday, showed a further increase in inventories to a new record level for a large advanced economy.

Britain was due to leave the EU on March 29, but Prime Minister Theresa May was forced to ask the EU for a delay after Parliament refused to back the exit plans that it had. she had negotiated with Brussels.

Currently, the Brexit is scheduled to take place at 12:00 GMT on April 12, unless May offers another option.

(For more information, please contact IHS Markit at +800 6275 4800 or e-mail at the following address: [email protected]; reports by David Milliken; editorial by Hugh Lawson; david.milliken @ reuters.com; +44 20 7542 5109; Reuters Messaging: david .milliken.thomsonreuters.com @ reuters.net)