Figures from the Markit/CIPS construction PMI survey have revealed the impact of the election on the sector…
Perhaps it is unsurprising that in the run up to the General Election the construction sector saw a slowdown.
The Markit/CIPS construction PMI survey, which is used to decipher the growth of the sector, showed all parts of the building industry were weaker in April than in previous months.
The headline index on the construction PMI fell to 54.2 from 57.8. Figures above 50 indicate expansion within the sector, but analysts had forecast a figure of 57.4, higher than what was achieved.
April’s figures also showed housebuilding and commercial construction slowed, while civil engineering workloads shrank.
Furthermore, new orders in the sector grew at the slowest rate since June 2013.
Figures also showed that growth halved in the first quarter of 2014 to just 0.3 per cent. This was the slowest since the end of 2012, when experts feared a second recession was on the horizon.
Economic recovery has been one of the main areas the Conservatives have focused on during the election campaign, in particular its record for reducing the deficit and creating a stronger economy. This news will undoubtedly be a blow for the party, especially so close to voting.
Tim Moore, senior economist at Markit, said there was “some grit in the wheels of decision-making” in the building sector in the run up to the election.
He added: “Construction firms widely noted delays with clients’ budget setting and a reduced propensity to commit to new projects.
“A number of survey respondents suggested that uncertainty related to the forthcoming general election had contributed to delays in clients’ spending decisions.”
Chief Economist at Markit Chris Williamson said: “Together with a steep slowdown in manufacturing and disappointing GDP data, the construction survey adds to evidence that the UK economy has hit a soft patch.”
Mark Robinson, the chief executive of Scape Group (a public sector owned built environment specialist) said it was not unusual for the industry to slow down prior to an election.
He said: “The current ‘wait and see’ attitude in this pre-ballot period is behind the reported lethargy in the sector, but our analysis of historic ONS 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.”