Construction suffers 'loss of momentum'

BRITISH construction sector activity slowed markedly in July to a four-month low as firms' confidence about the outlook deteriorated due to concerns about public spending cuts.

The Markit/Chartered Institute of Purchasing and Supply construction PMI (purchasing managers' index) fell to 54.1 in July from 58.4 in June, suggesting that expansion in the sector may have peaked.

Official data last month showed UK construction output jumped 6.6 per cent between April and June, its biggest rise in almost 50 years. But the latest PMI survey is likely to reinforce concerns this pace of growth will not be repeated.

Howard Archer, chief UK economist at IHS Global Insight, said: "The survey points to a marked loss of momentum in construction activity in July."