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The British construction company reported their biggest decrease in more than two months ago, when a house builder increased work back and a civil engineering company faced a new contract scarcity, a survey showed on Thursday.
S&P Global/CIPS July, the Construction Purchase Manager Index (PMI) also shows some easing in inflationary pressure – but the possibility of arriving late to influence the Bank of England, which is expected by economists to raise interest rates with half the percentage points then on Thursday.
The headline construction PMI sank to 48.9 in July from 52.6 June, the lowest since May 2020 during the decline of Pandemi Covid-19 and only the second time since then it has been below 50-level which separates growth from contractions.
Economists surveyed by Reuters hope that the index remains stable at 52.0. The latest official data shows that construction output has grown by 4.7% in the year to May.
Life pressure costs, higher interest rates and increased risk of recession for the British economy take victims of construction activities,” said Director of the Global Market Intelligence Economics, the Moore Team.
PMI all-sector, which includes data for much larger services and the manufacturing sector released earlier this week, dropped to 51.8 in July from 53.6 in June, the lowest since February 2021.
British consumer price inflation reached the highest level of 40 years of 9.4% in June, and some economists think it could reach 15% early next year because energy prices continue to surge.
PMI has shown the cost of construction materials has risen by the smallest amount since March 2021 because prices for steel and wood have fallen, but lack of labor continues to put up upwards on wages and act as a barrier to growth.
The building of the house said that economic uncertainty caused them to brake new projects, while civil engineering contractors struggled to find new projects after the existing. Commercial jobs – like restaurant and office refitting – stay strong, however.
