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Highlights
- Britain’s construction industry reported first slowdown in 18 months in July due to rampant inflation, higher interest rates, fragile consumer confidence and recession fear.
- According to the S&P Global/CIPS UK construction purchasing managers’ index, UK’s construction industry has dipped to 48.9 points in July.
Britain’s construction industry reported the first slowdown in 18 months in July due to rampant inflation, higher interest rates, fragile consumer confidence and recession fear, which has raised the cost of raw materials, labour and fuel. Civil engineering and housing activity have seen a decline, with the commercial sector seeing growth, according to US analytics giant S&P Global.
According to the latest S&P Global/CIPS UK construction purchasing managers’ index, UK’s construction industry has witnessed a contraction for the first time since January 2021. According to the index, UK’s construction industry has dipped to 48.9 points in July from 52.6 points last month.
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Civil engineering was among the worst hit segment in July as it witnessed a contraction of 40.1. This was its worst fall since October 2020. Meanwhile, housebuilding declined for the second consecutive month with a contraction rate of 49.4 points, and commercial work bucked the downturn, scoring a modest 52.3, indicating the weakest growth for 18 months.
Amid the increasing fear over the recession, Kalkine Media® looks at three construction stocks that you may keep an eye on.
CRH Plc (LON: CRH)
On Friday, an international group of diversified building materials businesses, CRH Plc, was enjoying a market cap of £24,330.41 million. The CRH shares on Friday was trading at GBX 3,217.50, up by 0.17% at 08:10 AM (GMT+1). The Ireland-based FTSE 100 listed company had recently completed the acquisition of Barrette Outdoor Living, Inc., for an enterprise value of US$1.9 billion. The company’s share hasn’t performed well as its one-year return, and YTD return stood at -11.97% and -17.53%, respectively.
Balfour Beatty Plc (LON: BBY)
On Friday, Balfour Beatty Plc, a leading international infrastructure group, was enjoying a market cap of £1,730.28 million. BBY shares on Friday were trading at GBX 280.80 and were down by 0.07% at 08:10 AM (GMT+1) on 4 August. The UK-based FTSE 250 listed company’s share value has underperformed over the past year, giving investors returns of -8.94%. The YTD returns, however, were far more favourable at 7.25%.
Barratt Developments Plc (LON: BDEV)
On Friday, the UK’s one of the largest residential property development companies, Barratt Developments Plc, was trading at GBX 494.50 and was up by 0.43%. With a market cap of £5,035.10 million, BDEV had an EPS of 0.65 on 4 August. The company’s share hasn’t performed well as its one-year return, and YTD return stood at -29.92% and -33.93%, respectively.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
