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UK PMI Signals Slowest Increase in Construction Output Since February

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July PMI data reported a slower growth in UK construction output due to raw material supply shortages and contracting subcontractor availability.

Source: IHS Markit

GBP USD up +0.20%,  EUR USD up +0.06%

The latest data signaled another steep increase in purchasing prices. A majority of the survey respondents reported a rise in their average cost burdens during July.

The IHS Markit construction PMI dropped sharply to 58.7 in July from June’s 24-year high of 66.3 but remained above the crucial threshold of 50.0.

House building was the best-performing category in July (at 60.3), followed by commercial building (59.2). For both categories, the rate of growth was the weakest since February as supply issues extended.

Order books continued to expand in July, but the recent increase in new work was the weakest since March. The purchase of inputs expanded at the slowest pace from April’s rate amidst a softer recovery in demand.

An increase in input cost inflation fueled concerns of supply shortages and robust demand for construction materials. While optimism on future output growth remained high, the index slowed down to its lowest for six months in July.

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