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04 Feb 2021 | 09:37

UK construction sector unexpectedly contracts in January

(Sharecast News) - UK construction sector activity unexpectedly contracted in January as the third national lockdown took its toll, according to a survey released on Thursday. The IHS Markit/CIPS construction purchasing managers' index fell to 49.2 from 54.6 in December, missing expectations for a reading of 52/9. This marked the first overall decline in construction output since May 2020.

A reading above 50.0 indicates growth, while a reading below signals contraction.

Tim Moore, economics director at IHS Markit, said: "The construction sector ended a seven-month run of expansion in January as a renewed slide in commercial work dragged down overall output volumes. House building was the only major construction segment to register growth, but momentum slowed considerably in comparison to the second half of last year.

"Construction companies continued to report major delays with receiving imported products and materials from suppliers, with congestion at UK ports contributing to the sharpest lengthening of delivery times since May 2020. Adding to the squeeze on the construction sector, rising steel and timber costs led to the fastest rate of input price inflation for just over two-and-a-half years."
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