Construction activity in the UK has seen a sharp fall in activity in April, attributed to the uncertainty surrounding today’s general election which has led to developers being extra cautious over spending decisions. The slowdown was the biggest the industry has witnessed in 22 months according to the UK construction managers’ index, down to 54.2 in April from 57.8 in March.
Civil engineering activity also dropped, and whilst residential construction activity did increase, it did so at a very slow pace. A separate survey last week also showed that activity within manufacturing declined in April.
Worries over how today’s poll will affect the economy, with the two main parties – Labour and Conservative – unexpected to win an overall majority. This is leading to a prolonged phase of political uncertainty.
Markit’s Chief Economist, Chris Williamson, “The construction slowdown may prove temporary, having been at least in part due to uncertainty and construction project delays in the run-up to the most closely fought General Election in a generation.
“Encouragingly, companies are expecting business activity to turn higher in coming months, with optimism about the year ahead remaining elevated in April, having climbed to a post-recession high in March.”
Some good news is that the construction industry continued to create jobs, albeit at a slower rate than last year’s average. In addition, the labour market hit a record high of 73.4 per cent in recent months which should result in increased wages vital for a recovery.
Tina Moore, Senior Economist at Markit, added: “Taken as a whole, the latest survey presents a far more upbeat picture than the curiously weak official construction output data for the first quarter of 2015.”
The pay level of subcontractors reportedly climbed at the fastest pace in 18 years.