The Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI®) indicates a slight moderation in growth in July at 62.4 compared to June’s 62.6. However, the figure remains above the neutral 50.0 mark, which it has now done for 15 months in a row. Expansion of the residential building sector was the greatest since November 2003, and civil engineering activity also registered a fast pace of growth. Commercial construction activity increased but at a slower rate than in June. Overall, the expansion of construction activity witnessed in July was one of the fastest since the summer of 2007. Meanwhile, new business intakes improved, as did purchasing activity. The construction sector also recorded the fastest rate of job creation since the survey began in April 1997.
“Overall the survey adds to the view that construction companies have performed impressively so far this summer, which raises the likelihood that the sands of time could wash away the construction weakness seen in the preliminary second quarter GDP release,” commented Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI®.
“Looking ahead, a pressing concern for construction companies is the availability of materials and suitably skilled labour to support the recent growth streak. Cuts to supplier capacity have ushered in the worst period of input delivery delays since the survey began in 1997, while this summer has also been notable for construction firms reporting near-record increases in rates commanded for sub-contracted work.”
In Germany, the Markit Construction PMI® indicates that the decline in construction activity began to temper in July at 48.2, up on June’s 15-month low of 45.5. The Index has now been below the 50.0 mark for four consecutive months. The greatest fall in activity was recorded by the civil engineering sector, but this was offset somewhat by a rise in housing activity and commercial building work. On a less positive note, new work and purchasing activity contracted in July. Although input prices increased, as they have done monthly for the last five years, July’s rise was the slowest since August 2012.
“Germany’s construction sector remains in contraction territory at the start of the third quarter, with activity and new orders falling further. The main positives from July’s survey results are increases in work on residential and commercial building projects and the easing in the rate of job losses in the sector. The big concern in Germany is the divergent sector trends within the economy, with manufacturing and services expanding but construction suffering from a further month of contracting output,” said Markit Economist Oliver Kolodseike.
Read the article online at: https://www.worldcement.com/europe-cis/06082014/germany-and-uk-markit-construction-pmi-report-highlights-245/