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Gloucestershire Business News

Construction industry tries to build on shaky growth

The brakes went on construction activity in June across the UK as house-building declined to the slowest growth since February amid a slowdown in new orders which analysts are attributing (at least in some part) to uncertainty ahead of today's election result.

According to a new survey from S&P Global, many firms were seeing orders grow, but were adopting a wait-and-see approach, with the latest UK Construction Purchasing Managers' Index (PMI) falling to 52.2 in June from a rating of 54.7 in the previous month.

The figure fell below the median forecast of 53.6 in a poll of economists, but registered above the threshold of 50 which is seen as indicating growth. Key factors included a slight rise in raw materials pricing and an easing on supply chain pressure.

Andrew Harker, economics director at S&P Global Market Intelligence, said that any slowdown could partially be attributed to the industry not knowing the political pathway ahead.

He said: "While there were signs of a slowdown in the latest survey period, most notably around housing activity, firms indicated that a slowdown in new order growth was in part related to election uncertainty."

He added: "We may therefore see trends improve once the election period comes to an end."

Within the survey, activity in civil engineering and commercial construction climbed, while demand for residential building work was weaker, despite May having been the best period in the previous 19 months.

Mr Harker added that "confidence in the year ahead outlook remained strong and firms increased employment to the largest extent in ten months."

Meanwhile new data from risk analysts at Creditsafe today shows that the volume of construction administrations went up for the second consecutive month.

In total, administration moves were announced by 31 businesses in June, a rise of seven on May's total. In April 2024, just 13 said they couldn't settle their debts.

A total of 68 failures in Q2 of 2024, however, represented the lowest quarterly tally since Q3 2022, when 64 firms called time, while the 147 construction companies going into administration in the first half of 2024 signals a 16% year-on-year fall.

● In a notable county loss in March this year, Gloucestershire bespoke builders Chappell and Dix closed down with the loss of more than 60 jobs.

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