The monthly Markit/CIPS Purchasing Managers’ Index (PMI) increased to 58.1 in June, reaching a four month high…
According to the latest figures published in the monthly construction PMI the sector saw the highest rate of growth for four months during June.
The monthly Markit/CIPS PMI also recorded confidence in the industry surged to an 11 year high following a lull in the period before the General Election.
The figure of 58.1 was the largest increase in a year and showed promise in the sector.
Tim Moore, an economist at financial data company Markit, said: “The extent of the recent rise in construction optimism is partly down to relief that pre-election uncertainty has now passed, but it also suggests that firms are infused with confidence that underlying demand will continue to recover.”
The fastest growth was seen in the house building sector, with civil engineering projects and commercial work catching up.
The rate of new orders reached the strongest level since last October, despite growing concerns about skill shortages and increasing labour costs.
However, official data revealed on Tuesday also showed British construction output fell a little during the first three months of the year. Comparatively, it was still higher than a year earlier, as it was up 4.5 per cent.
Commenting on the latest data, Richard Threlfall, head of infrastructure, building and construction at KPMG UK, said: “Today’s figures confirm the acceleration in demand for UK construction. The industry will soon be running white hot, as housing, commercial and infrastructure demand are rising together.
“What we are seeing is very unusual. Private demand is rocketing in response to an improving economy and much stronger business confidence. And public demand is surging too, following the Government’s post-election re-commitment to a huge infrastructure investment programme.
“The critical question is, can the industry deliver? I am concerned it cannot. The industry is about to be engulfed in a tidal wave of work but it’s struggling already with a huge skills shortage, weak Tier 1 balance sheets, and a lack of investment in capacity. I expect a lot more industry trauma as this story plays out.”
