Construction industry records strongest growth rate for seven months

For the third month in a row, the UK construction industry has strengthened with more activity and higher recruitment levels, marking a return of optimism in the sector.

Data released last month from the UK Construction Purchasing Managers’ Index showed that the growth rate across the country’s construction industry, in both residential and commercial property, is at its highest level for seven months with new orders coming in at the fastest rate since May 2017.

The Index is the building industry’s performance monitor, and IHS Markit which collates the data highlights that this is the third successive month when the construction industry has experienced positive growth with activity above 50 being the benchmark. The latest month-on-month figures show a rise from 52.5% in May to 53.1% in June.

Duncan Brook, group director at the Chartered Institute of Procurement and Supply (CIPS), said: “Despite being hampered by economic uncertainty, firms reported an improved pipeline of work as clients committed to projects, and hesitancy has been swept away.”

Recruitment levels are up year on year

The construction sector is continuing to try and focus on initiatives to attract more employees and contractors to work in the industry and to date recruitment levels are increasing faster than the previous 12 months. With an improvement in activity, Markit identifies that increased demand has resulted in the highest increase in input prices since September 2017 and a longer waiting time for supplies.
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These positive results are in stark contrast to the beginning of 2018, when severe weather conditions affected the building sector and February and March recorded a significant downturn.

Blane Perrotton, managing director at Naismiths surveyors, said: “Optimism remains keenest in the north-west, West Midlands and Bristol, where markets are buoyant. That said, even London is beginning to see a creeping improvement in sentiment. These figures are flattered by comparison to the weak data recorded at the start of 2018. Genuine momentum is revealed in both new orders and output.”

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