Construction PMI – “storm clouds have gathered but not yet broken” – Naismiths surveyors
Commenting on the UK’s latest Construction PMI data, Gareth Belsham, director of the national property consultancy and surveyors Naismiths, said: “Storm clouds might be gathering but they haven’t yet broken.
“Britain’s construction sector is still busy and new orders continue to roll in, but it is losing momentum.
“The pace of new orders has slowed to its weakest level of the year so far, and while many builders still have bulging order books, their optimism about what the next 12 months will bring is slowly starting to slide.
“This week’s decision by the Bank of England to raise interest rates, not to mention its bleak economic forecast, will serve as a reality check for housebuilders in particular.
“While the property market remains buoyant, rising borrowing costs and the possibility of a recession will both cool demand in coming months – and this may be why residential construction is already growing more slowly than any other sector.
“Until now the construction industry has generally managed to shrug off the impact of soaring material and transport costs. But with cost inflation still painfully high – and back to its highest level since last September – any further slowdowns in growth and demand could take an outsized toll.
“With the outlook for construction steadily darkening, things are finely balanced for the industry that has long been the best bellwether of the wider economy.”
