Activity in the UK construction industry has shown signs of recovery after a record seven-year low in July, according to new research.

The latest Markit/CIPS Construction PMI index recorded 49.2 in August, up from 45.9 in July. While still below the 50.0 neutral reading, the pace of decline was much steadier than experienced in previous months.

The monthly survey revealed new order volumes moved closer to stabilisation, with the latest reduction the least marked since May. This led to a renewed rise in staffing levels across the construction sector and a rebound in business expectations for the next 12 months.


However purchasing costs rose at an accelerated rate due to the impact of the weak pound.

Tim Moore, Senior Economist at Markit, said while the industry downturn has "eased considerably", it indicates only a "partial return" towards stabilisation.

"There were still widespread reports that Brexit uncertainty had dampened demand and slowed progress on planned developments, especially in relation to large projects," he said.

"As a result, total new order volumes continued to fall during August, which stands in contrast to the three-year run of sustained growth seen prior to May 2016.

"Despite another month of reduced output, the latest figures can be viewed as welcome news overall after a challenging summer for the construction sector. The move towards stabilisation chimes with the more upbeat UK manufacturing PMI data for August, and provides hope that the near-term fallout from Brexit uncertainty will prove less severe than feared."

(LM/CD)