New orders and purchasing activity also fell and employment growth eased to a six-month low.
The seasonally adjusted Purchasing Managers’ Index (PMI) – which is based on a single question asking respondents to report on the actual change in their total construction activity compared to one month ago – dipped below the 50.0 no-change mark in April. At 49.7, down from March’s 52.5, the index signalled the first decline in activity since April last year. However, the rate of contraction was marginal overall.
Two of the three monitored broad categories of the construction sector saw declines in activity. Work on residential building projects fell for the first time in three months, but the rate of decline was weak in the context of historical data. Civil engineering activity also fell, thereby ending a period of growth that had lasted for four months. Meanwhile, work on commercial building projects increased for the twelfth month running, although the rate of growth eased to only a marginal pace that was the weakest in this sequence.
The latest survey data signalled a further sharp decline in new orders. Order intakes have now fallen for 25 successive months and at the quickest pace in just over one year. Anecdotal evidence suggested that increased competition and price pressures were some of the reasons behind the latest decline.