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Lockdown hits UK construction harder than expected - PMI

Andy Bruce
·1-min read
FILE PHOTO: New houses under construction are pictured in Aylesbury

By Andy Bruce

LONDON (Reuters) - Britain's construction industry unexpectedly slid back into decline last month as the country re-entered a national COVID-19 lockdown, despite another strong performance from housebuilders, a survey showed on Thursday.

The IHS Markit/CIPS Construction Purchasing Managers' Index (PMI) slipped to 49.2 from 54.6 in December, its lowest since May. The index was below the 50 threshold for growth and well beneath the 52.9 consensus in a Reuters poll of economists.

With the services and manufacturing sectors also taking a hit last month, the construction survey confirmed a sharp slowdown in Britain's private sector economy, with the all-sector PMI sliding to 42.0 from December's 50.8.

"The construction sector ended a seven-month run of expansion in January as a renewed slide in commercial work dragged down overall output volumes," said Tim Moore, economics director at IHS Markit.

Housebuilding was the only construction sector to report continued growth in January.

"Adding to the squeeze on the construction sector, rising steel and timber costs led to the fastest rate of input price inflation for just over 2-1/2 years," Moore said.

The Bank of England is due to publish its latest outlook for inflation and economic growth at 1200 GMT.

(Reporting by Andy Bruce; Editing by Catherine Evans)