The recovery in the construction industry faded unexpectedly last month as new work dried up. Housebuilding, buoyed by strong demand since the lockdown was eased, was the best performing area but civil engineering slid back into contraction and the commercial sector was weaker.
The closely watched construction purchasing managers’ index (PMI) slowed to 54.6 in August, down from a near five-year high of 58.1 in July. It remains above the 50 mark that indicates growth but economists had expected a rise to 58.5.
Construction companies continued to shed jobs, although at a slightly slower pace than in July. Losses, however, remain among the fastest seen over the past decade. On the upside, business optimism rose to a six-month high.
Tim Moore, economics director at IHS Markit, which compiled the survey, said: “Construction firms turned their hopes towards a boost from major infrastructure work and reorienting their sales focus on new areas of growth in the coming 12 months.”