Budgets delayed, projects stalled
The Markit/Chartered Institute of Procurement & Supply snapshot of industry fortunes, where a score above 50 signals growth, slowed to 54.2 from 57.8 last month. That represents the weakest overall growth since June 2013.
Civil engineers, commercial builders and, to a lesser extent, house builders all felt the squeeze. The headline reading was well below the 57.5 that had been expected by financial analysts.
Growth in new orders dipped while confidence is down from March’s nine-year high, echoing the weakness seen by UK manufacturers during April.
“The uncertain general election outcome appears to have put some grit in the wheels of decision-making,” said Markit’s senior economist, Tim Moore. “Construction firms widely noted delays with clients’ budget setting and a reduced propensity to commit to new projects.”
The chief executive of CIPS, David Noble, added: “This deceleration has been attributed to project delays and hesitancy as the country prepares to vote.”
Mark Robinson of SCAPE, a public sector procurement specialist, agreed that election uncertainty was probably behind the slowdown in building activity. But he added that this was a normal pre-election pattern.
Our analysis of historic ONS [Office for National Statistics] data shows that output does hit the brakes in the run up to an election, but then the industry revs up in the subsequent months, rising by an additional 2 per cent on average – this is just part and parcel of a typical election year.
Mark Robinson, SCAPE, Group Chief Executive
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