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UK construction activity falls in March at fastest rate since 2009 – PMI

imageEconomic Indicators4 hours ago (Apr 06, 2020 04:40AM ET)

(C) Reuters. FILE PHOTO: Workers are seen as the sun sets behind a construction site in London

By David Milliken

LONDON (Reuters) – Britain’s construction sector saw the sharpest fall in activity since the financial crisis last month, a survey showed on Monday, despite facing much less pressure than other industries to shut down operations due to the coronavirus.

The figures from financial data provider IHS Markit and the Chartered Institute of Procurement and Supply (CIPS) also confirmed data last week that showed the British private sector as a whole is contracting at its fastest rate in more than 20 years.

The construction Purchasing Managers’ Index (PMI) tumbled to 39.3 in March from 52.6 in February, its lowest since April 2009 and well below economists’ average forecast of 44.0.

The 13-point monthly fall was the largest since the survey began in 1997, and the index looks likely to worsen.

“The sector is stuck in quicksand and sinking further,” Duncan Brock, group director at CIPS, said.

Britain’s government has not required general construction work to stop to slow the spread of coronavirus – in contrast to its order for most shops and restaurants to close to the public, and for workers in other sectors to stay home if possible.

Nonetheless, IHS Markit said building companies reported stoppages last month as they sought to comply with guidance to keep workers 2 metres apart where safe to do so, as well as a big fall in new orders.

“Survey respondents widely commented on doubts about the feasibility of continuing with existing projects as well as starting new work,” IHS Markit economist Tim Moore said.

“Construction supply chains instead are set to largely focus on the provision of essential activities such as infrastructure maintenance, safety-critical remedial work and support for public services in the weeks ahead,” he added.

Last week, IHS Markit’s composite PMI for the manufacturing and services sectors fell to its lowest on record at 36.0 for March, and Monday’s all-sector version including the construction industry was also a record low at 36.3.

UK construction activity falls in March at fastest rate since 2009 – PMI

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