Growth in UK construction during July was the weakest in four months, according to the latest Markit/Chartered Insitute of Purchasing & Supply (CIPS) report.
New order growth was sustained at a slower rate, while employment fell in the sector despite increased output. Positive sentiment eased again amid concerns over public sector spending cuts.
Markit economist Sarah Ledger said the slowing of growth represented a “normalisation” from the strong rates of expansion recorded in the second quarter.
“Perhaps more concerning was the continued impact on confidence that impending public sector spending cuts and the scheduled VAT rise have had,” she said.
CIPS chief executive David Noble said there was no cause for alarm yet and an immediate “double dip” seemed unlikely. But he said it was telling that contractors accommodated the slowdown by making immediate job cuts – showing how tight things still were.
“The industry has to come to terms with a much altered, post-recession landscape, where full recovery may take some time yet,” he said.
