UK construction PMI rebounds to seven-month high

03-Jul-2018

Blane Perrotton, managing director of the national property consultancy and surveyors Naismiths, said: 

“The construction industry somehow skipped springtime this year – and has been catapulted from a polar winter into a heatwave. 

“True, the figures are flattered by comparison to the weak data recorded at the start of 2018. But such solid improvements in both output and new orders reveal some genuine momentum. 

“In part this is the release of pent-up demand, which has been building for months. There is only so long that investment decisions can be delayed, and on the front line we’re seeing increasing numbers of developers opting to pull the trigger before the opportunity passes them by. 

“While optimism is strongest outside London – with the North West, West Midlands and Bristol markets all buoyant – even the capital is starting to see a creeping improvement in sentiment.

“The downside of this is the spectre of rapid cost inflation, as construction firms rush to recruit from a shrinking pool of available workers and the weak Pound keeps imported material costs high. 

“Housebuilders remain the poster children of the industry but commercial construction activity is flickering back into life too. Overall this rebound in output, sentiment and orders is welcome but no-one should take it as a definitive reversal in construction’s fortunes. 

“With the Brexit clock now onto its final countdown, there remains considerable scope for volatility in the months ahead and the challenge for the industry now is to hold on to these impressive gains.”