UK construction sector loses momentum, Jan PMI dips to 5-month low

Survey results from IHS Markit and the Chartered Institute of Procurement and Supply on Thursday revealed a slowdown in U.K. construction sector growth, with business activity and incoming new work both expanding at weaker rates than at the end of 2016.

The U.K. Markit/CIPS purchasing managers' index for the construction sector rose to 52.2 from 54.2 in December, missing forecast a score of 53.8. It was the weakest expansion since the recovery began in September 2016.

All three sub-sectors (housing, commercial and civil engineering) recorded softer rates of output growth in January. Although house-building remained the best performing category, the latest expansion was the weakest for five months.

Job creation hit an eight-month peak survey with respondents mainly attributing it to planned project starts during the coming months. Input cost inflation was the highest in almost eight-and-a-half years in January, which was widely linked to rising prices for imported materials at the start of 2017.

“UK construction firms experienced a subdued start to 2017. The weak pound continued to have an inflationary impact on the UK construction sector in January." said Tim Moore, Senior Economist at IHS Markit.