Construction confidence rises as England soar

Construction is basking in early summer sun with figures hitting a seven-month high in June, the latest IHS Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI®) has revealed.

Solid expansion across the board has been underpinned by rises in residential work and upturns in commercial work.

With the government push to tackle the housing crisis, house building remains the best performing area of activity, while new orders rises show an emerging confidence in the industry. This is supported by the largest upturn in input buying for two-and-a-half years.

Cost concerns are still on many firms’ minds, with the improved demand for construction materials resulting in longer lead times from suppliers and the most marked increase in input prices since September 2017.

The June PMI® figure is posted at 53.1 for June, up from 52.5 in May and solidly above the 50.0 no-change value for the third month running.

The latest reading shows the sharpest overall rise in construction output since November 2017, with new orders at their strongest since May 2017.

The return to growth is led by commercial building, which had the strongest overall rise in construction output, expanding at the fastest pace since February. At the other end of the scale, civil engineering activity rose only slightly in June, with the rate of growth easing to a three-month low.

With promising figure to hand, the latest survey also indicated rebound in business optimism from May’s seven-month low, although the degree of positive sentiment remained much weaker than the long-run survey average.

Peter Vinden, Managing Director of the Vinden Partnership, said: “The rises in construction activity have shadowed the rises in temperature across the country, with strong new orders prompting confidence for the second half of the year.

“House building continues to provide a solid foundation on which the industry can build. While external confidence in the industry can be measured from the growth in commercial projects.

“However, there are concerns over costs and supply, with longer delivery times for construction materials during June and higher transportation costs resulting in the sharp increase in cost burdens.”

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