Market Sentiment Drops

 

Market Sentiment Drops

The UK construction sector is experiencing a period of contraction as uncertainty and weak confidence knocks growth.

Fractious sentiment on the market outlook, especially within Financial Services, has resulted in UK companies delaying a commitment to new building contracts, resulting in the UK construction sector entering in to a period of contraction for the month of September, a fact highlighted by a recent IHS Markit/CIPS survey of purchasing managers who work in the construction space. 

The drop in volume of new commercial building projects was the yardstick, with the survey indicating a drop from 51.1 to 48.1 month-on-month from August to September 2017.  A rating of sub ’50’ suggests a market contraction. 

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Aside from the expected drop in the market following the EU referendum of 2016, the registered decline in real development activity recorded this September marks the first significant drop measured by the PMI index in recent times. 

One sub set of the real estate development market causing significant concern is the financial sector, with a dearth of new projects in the pipeline to continue the momentum as others complete. 

The contraction in commercial projects was melded with a declining number of projects in the infrastructure sector, with key government projects yet to break ground. 

What will have a bearing on market sentiment is the speed and skill that the UK government employs on delivering a ‘soft Brexit’, as the longer the discussions are drawn out or lead to an impasse on key agreements the more aggravating this is for UK plc as a whole.

#construction  #brexit 

 
Steven Thomas