UK Housebuilding Recovery Stalls Ahead of General Election

UK: Britain’s housebuilding industry paused its recovery in June as construction firms delayed projects ahead of the upcoming general election. The UK purchasing manager index for construction, as reported by S&P Global Market Intelligence, fell to 52.2 in June from 54.7 in May. This figure was below the expected reading of 54, although it remained above the growth threshold of 50.

Construction firms attributed the slowdown in new orders, the weakest since February, to election-related uncertainty. Despite promises from both the ruling Conservative Party and the Labour opposition to build more homes, housebuilding was identified as the weakest segment in the PMI survey. These findings indicate that the economy's recovery from recession slowed in the second quarter, with the composite PMI also showing a broader slowdown in June.

The new government will face an economy grappling with a cost-of-living crisis and higher interest rates. The construction sector, in particular, is heavily impacted by increased borrowing costs and a stagnant housing market.

Source: Bloomberg