UK construction output declines again in July

According to the report from IHS Markit/CIPS, UK construction sector output declined for the third month running in July, reflecting lower volumes of work across all three broad categories of activity. The latest survey also revealed a sharp drop in new order intakes, which survey respondents mainly attributed to subdued economic conditions and domestic political uncertainty. Weaker demand contributed to a slide in business optimism towards the year-ahead outlook for construction activity, with the degree of confidence the lowest since November 2012.

At 45.3 in July, the headline seasonally adjusted UK Construction Total Activity Index posted below the 50.0 no-change value for the fifth time in the past six months. The latest reading was up from June's ten-year low of 43.1 but still signalled a marked downturn in total construction activity. 

Commercial construction was the worst performing category in July, followed closely by civil engineering activity. House building fell for the second month in a row during July, but the rate of decline was only modest and eased from the three-year record seen in June. Reports from construction companies suggested that sluggish housing market conditions had a negative influence on residential work during the latest survey period.