UK construction sector hiring sees slowdown during June

Posted 5th July 2017 in For Businesses For Workers

The UK construction sector experienced a slowdown in its rate of new job creation during June 2017, coinciding with a relative downturn in the performance of the industry as a whole.

Data from the latest UK Construction Purchasing Managers’ Index from IHS Markit and the Chartered Institute of Procurement and Supply (CIPS) has indicated that growth momentum for the sector dipped from the strong performance seen during May.

The headline index figure for the month came to 54.8, which remains above the 50.0 no-change mark for the tenth month in a row, but was nevertheless lower than May’s 56.0 score, which represented a 17-month high.

Survey respondents said they had generally observed signs of renewed risk aversion among clients due to an uncertain economic outlook and heightened political instability following the June general election, with weaker rises in new orders and business activity.

As such, construction companies reported the slowest rise in employment numbers for three months in June, with concerns about the current business outlook leading some organisations to refrain from replacing voluntary leavers.

With the overall rate of inflation also ticking upwards again during June, construction firms’ expectations for growth over the next 12 months were revealed to be the lowest so far in 2017, suggesting that the sector’s mood may remain cautious as businesses continue to monitor the UK’s economic performance and the outcome of the Brexit negotiations.

Duncan Brock, director of customer relationships at CIPS, said: “With some doubt edging into the psyche of the construction industry about positive trading conditions, the sector will be guarding against continuing higher input prices with another eye on the possibility of rising interest rates as well.”

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