U.K. Construction Unexpectedly Slows as Homebuilding SlumpsScott Hamilton
U.K. construction grew at its slowest pace in 10 months in February as customers put off projects and builders curtailed hiring in response to an uncertain outlook.
Markit Economics said on Wednesday that its Purchasing Managers’ Index dropped to 54.2 from 55 in January, with a reading above 50 indicating expansion. Economists had forecast an increase to 55.5, according to the median estimate in a Bloomberg survey.
Homebuilding, the strongest part of the industry for most of 2015, was the weakest performer last month, growing at its slowest pace since June 2013.
The data adds to evidence of a cooling economy. Markit’s manufacturing survey on Tuesday showed factories had their worst month in almost three years in February and a gauge of services to be published Thursday is forecast by economists to decline.
Construction order growth weakened and builders were the least optimistic about their year-ahead prospects since December 2014, Markit said.
“Some clients had been hesitant to commit to new projects so far in 2016,” Tim Moore, an economist at Markit, said in a statement. “More cautious purchasing strategies can be seen as another indication that construction firms are preparing for an extended period of softer growth this year.”
Builders cut back on employment in response to the uncertain outlook, with net job creation easing to its lowest since August 2013, Moore said.