UK construction sector slows down in January

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Growth in the UK construction sector slowed down in January to its weakest level for nine months.

The Markit construction purchasing managers' index (PMI) fell to 55 from 57.8 - well below the 57.5 forecast by economists.

The figure contrasted with a stronger-than-expected start for the manufacturing sector published on Monday.

Factory output rose from 52.1 in December to 52.9 in January.

Any figure above 50 indicates growth in the sector.

Markit economist Tim Moore said construction firms were struggling for momentum, with increased economic uncertainty holding back new orders and contributing to one of the weakest rises in output levels since summer 2013.

Bricks shortage

"Taken together with the slowdown in new order growth, the latest survey suggests that construction companies are braced for a relatively subdued first quarter," he said.

David Noble, chief executive of the Chartered Institute of Procurement and Supply, which compiles the survey along with Markit, said a shortage of bricks and blocks contributed to the slowdown.

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Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said weakness in construction orders and a downturn in public sector infrastructure work, which accounts for about a quarter of total construction and is not covered by the PMI, suggested the sector would post only "lacklustre growth" this year.

Optimism among construction companies waned to its lowest level since December 2014, the survey showed.

"Some firms highlighted concerns that underlying demand conditions had started to soften," Markit said.

Analysts use the PMI surveys for early signals about the economy. However, the construction sector figures have been at odds with data used in official growth figures in recent months.

Growth in the dominant UK service sector fell slightly in December to 55.5 in December, down from 59.9 in November, but remained above average.

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