Construction sector growth slows due to decline in residential construction

The UK construction sector continued to expand last month, but its recovery lost some momentum due to the slump in housing construction.

Companies also reported slower growth in new orders, with some blaming uncertainty over the upcoming general election.

The latest S&P Global Construction Purchasing Managers’ Index (PMI) came in at 52.2 in June, down from 54.7 in May.

Any score above the threshold of 50.0 indicates that activity in the industry is increasing, while a score below the threshold indicates that activity is contracting.

The sector continued to grow, but was noticeably weaker than the 54 expected by analysts’ consensus.

Andrew Harker, chief economic officer at S&P Global Market Intelligence, said: “The continued growth of the UK construction sector in June marks a continued expansion across the sector throughout the second quarter of the year.

“Although there were signs of a slowdown in the latest survey period, particularly in residential construction, firms indicated that the slowdown in new order growth was partly related to election-related uncertainty.

“We may therefore see an improvement in these trends once the election period is over.”

Growth across the sector was driven by commercial construction work, which rose “significantly” in June.

The study found that there was growth in civil engineering, but the pace was slower.

Meanwhile, the housing market saw prices fall after output fell in May after its first increase in 19 months.

Research suggests another surge in new business helped boost growth, although it still fell to its lowest level since February.