UK Construction PMI surges to 14-month high - Naismiths surveyors

02-Aug-2018

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

“Resi has ridden to the rescue again. After a few softer months, Britain’s housebuilders have cemented their reputation as the engine room of the construction sector.

“The surge in residential building – the biggest seen since well before the Brexit referendum – has put a spring into the step of the industry as a whole.

“But with both orders and sentiment strengthening across the board, the housebuilders’ success is no mere ‘get out of jail’ card. Rather it’s a highlight in an industry which is collectively rediscovering its mojo.

“On the frontline we’re seeing the highest levels of optimism outside London – with the North West, West Midlands and Bristol markets particularly buoyant – but sentiment is notching up in the capital too.

“The unwelcome side effect of this mini-recovery is additional pressure on the supply chain. While input cost inflation has eased a touch from the nine-month high seen in June, building firms’ increasingly frenzied competition for workers is driving up wages while the weak Pound is keeping imported material costs high.

“After a fairly miserable start to the year, the construction industry’s turnaround will give a shot in the arm to the economy as a whole.

“While a modest increase in interest rates is unlikely to blow Britain’s builders off course, the final countdown to Brexit could be strewn with banana skins. Construction is more reliant on business confidence than almost any other sector – and these impressive gains could be reversed if Britain’s exit from the EU is messy or inconclusive.”