Construction industry suffers as housebuilding activity falls in January

Activity in Britain's construction sector came within of whisker of stagnation last month, sliding to a four-month low as housebuilders endured a tough start to the year.

The Markit/CIPS UK Construction purchasing managers' index (PMI) recorded a reading of 50.2 in January, down from 52.2 in December, with economists predicting a figure of 52.0.

A reading above 50 indicates growth.

In a gloomy update, the industry saw housebuilding activity shift into reverse and growth in commercial and civil engineering stutter as market uncertainty took its toll on new orders.

It comes after output in the manufacturing industry unexpectedly slipped in January as the industry grappled with a double-whammy hit of slowing growth and escalating costs.

Sterling was down 0.3% to 1.421 against the US dollar following the announcement, while the euro slipped 0.2% to 1.138.

Sam Teague, economist at IHS Markit, said: "January's PMI data indicated a difficult start to 2018 for the UK's construction sector, underlined by business activity growth slumping to a four-month low and new orders sliding back into decline.

"A contraction in house building added to lacklustre commercial building and civil engineering markets, and reduced inflows of new work suggest overall activity could slip into decline in February.

"Furthermore, cost pressures remained intense, fuelled by shortages of input materials and high costs for imported products."