Construction industry growth hit a 17-month high in May according to the latest Markit/CIPS UK Construction PMI figures.
In May output increased to 56.0, a big jump from April’s figure of 53.1. Although the sharp rise was well above the growth threshold of above 50.0, it was still someway off the post-financial peak of 64.6 seen at the start of 2014.
The strong performance was driven by a strong performance in the house building sector. The upturn was the sharpest since late 2015.
There was further encouraging news with those surveyed reporting a strong pipeline of new development projects and robust underlying demand conditions.
The civil engineering and commercial building sub sectors performed strongly across May. The figures follow on the heels of April’s impressive showing.
Some respondents noted economic uncertainty continuing to have an impact saying client spending but any doubts failed to stop a significant rise in the levels of employment within the construction industry, increasing at its fastest rate since January.
Cost inflation also seemed to ease in May, with input prices increasing at their slowest rate for seven months. Anecdotal evidence revealed that some respondents felt that the worst of the price rises in construction materials has passed.
Tim Moore, Senior Economist at IHS Markit said: “May’s survey data reveals that the UK construction sector has started to recover strongly from its slow start to 2017. House building was the key growth driver, with work on residential projects rising at the fastest pace since December 2015. A sustained rebound in residential building provides an encouraging sign that the recent soft patch for property values has not deterred new housing supply. Instead, strong labour market conditions, resilient demand and ultra-low mortgage rates appear to have helped boost work on residential development projects in May. The forward-looking elements of the latest survey are reassuring for the construction sector, notably the acceleration in new business growth to its strongest so far this year.”
Source – UK Construction Online