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Contact Tough April for builders as construction activity slows

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Tough April for builders as construction activity slows

The UK’s construction sector suffered a tough April as buyers reported the lowest level of output growth for three years, according to the latest figures.

Although the Markit/CIPS UK Construction PMI index reading of 52.0 still indicates expansion, the figure is down from 54.2 in March and at its weakest rate since June 2013.

Commercial building was the strongest performing broad category of activity in April with residential construction growth rebounding only slightly from March’s 38-month low. Construction firms signalled a renewed decline in confidence about the year-ahead business outlook in April, while staffing levels continued to increase across the construction sector during the fourth month of the year, representing the longest period of sustained employment for around a decade.

Commenting on the findings, Charles Holland, head of residential investment at Marsh & Parsons, said: “Residential building activity has made some recovery from the dip it suffered in March, while the construction market as a whole is showing a number of positive long-term signs. For example, employment levels in the sector are continuing to rise, suggesting building companies are bracing themselves for higher demand in the future. “Most encouraging is the activity at the first-time buyer end of the market, where a range of Government incentives have been designed to stoke demand such as the recently-extended Help to Buy scheme, which has led to a building boom in affordable housing.”

This is particularly evident in certain outer boroughs of London, where the construction of properties aimed at first-time buyers has encouraged a rejuvenation of areas that had previously been overlooked by developers. Ensuring that this great momentum is sustained is the Government’s next challenge.

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