- U.K Construction Slows to Weakest in a Year
Heightened economic uncertainty and drop in business investment in the United Kingdom plunged growth in the construction sector to the lowest in a year in August.
The construction Purchasing Managers’ Index declined from 51.9 in July to 51.1 in August, according to the IHS Markit report. The weakest since August 2016.
Although, the figure is above the 50 level that separate expansion from contraction, it is still below the 52 projected by economists surveyed prior to the release.
According to IHS Markit, growth in the sector was weighed upon by low business investment in August, the second straight month, due to lack of new orders to replace completed projects.
Also, businesses were reluctant in hiring amid growing economic uncertainty, pushing employment growth in the sector to the slowest pace since July 2016.
The report further highlighted the continuous decline in commercial projects as the major cause of slowdown in the sector as it offset robust growth recorded in residential projects.
Similarly, cost pressures were at the lowest in nearly a year as the impact of falling pound on building materials were minimal.
While economic uncertainty continued to impede growth and new investment. The weak pound has failed to bolster oversea orders and substantially sustain the manufacturing sector amid Brexit negotiation.
The economy grew at 0.3 percent in the second quarter, the same as the first quarter. Another indication that the economy is stalling. Again, retail sales declined at the fastest pace in 12 months.