UK housebuilding slipped to three-year low in March
Growth in construction of new homes in Britain ebbed to its lowest level in three years in March, according to a survey yesterday that showed the overall expansion in the building trade held at its weakest in nearly a year.
The Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) held steady at 54.2 in March, matching February’s 10-month low and holding a whisker above forecasts.
While the pace of growth picked up in commercial property and civil engineering, the PMI’s gauge of housing construction activity sank to its lowest level since January 2013, before Britain’s economic recovery really started to take hold.
“Residential building has seen the greatest loss of momentum through the first quarter of 2016, which is a surprising reversal of fortunes given strong market fundamentals and its clear outperformance over the past three years,” Tim Moore, senior economist at Markit, said.
Housebuilding is a hot political topic in Britain. Despite government attempts to boost housebuilding, industry bodies and mortgage lenders report demand outstripping supply, pushing up property prices in most of the country.
Markit said that barring a blip the month before last year’s national election, overall growth in construction was its weakest since the summer of 2013, with the PMI having sagged almost six points from a recent September peak.
“Heightened uncertainty about the business outlook appears to have weighed on overall construction demand so far in 2016, with survey respondents citing cautious client spending patterns and a reduced willingness to commit to new projects.”