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James Whitecross
21/05/2019
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Growing housing market props up construction sector

 

 

 

Britain’s construction industry grew again in April after two months of decline. This was largely driven by the fastest rise in house building this year. Bouncing back from the first month on month fall in more than two years last month, this is the house building markets the strongest showing since December.

The PMI (the construction purchasing managers index) stood at 50.5 in April. A read of above 50 indicates growth; where below would indicate a decline. Although modest, the latest read shows an overall expansion in housing construction. This is believed to be the repercussions of a strong injection of new housing buyers in the UK, propelled by the help-to-scheme for first-time buyers.

Other areas of construction remained weak and, amidst the UK’s Brexit debacle, commercial construction clients remained hesitant to proceed. So, while this would usually be considered positive news given the uncertainty at the start of the year with mounting fears over a no-deal Brexit, the weakness elsewhere is definitely food for thought.

In other news, civil engineering activity decreased last month. Firms said there was a modest decline in total new orders in April, with the fall in new work reaching its quickest pace in more than a year. Again, the uncertain political state of affairs in the UK was largely to blame for stemming new commercial projects.

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, said house building was ‘the only saviour of a sector otherwise heading for contraction again this month as deferred client decisions continued to impact on larger commercial and infrastructure projects, throwing the industry off-balance.’

Author: James Moore, CMO at buildy.co

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