The pace of contraction in British construction activity slowed in January to 48.4 from 44.4 in the prior month, as a degree of uncertainty around Brexit was lifted following December’s general election result and optimism crept back into the market, according to responses to an IHS Markit/CIPS survey published on Feb 4.
A reading of 50 denotes the level which separates contraction from expansion, indicating that most survey respondents still experienced or witnessed a challenging operating environment, but to a lesser degree of intensity.
The improvement in commercial and civil engineering sector subcomponents of the headline index appears to be largely driven by confidence, that optimism post the general election would translate into new contracts and projects in 2020, rather than actual new tenders.
While the pace of contraction reached an eight-month low in January, Davis Index understands that it will take several months for project pipelines to recover and even more time to impact apparent steel consumption.