Optimism for the UK’s construction sector over the coming year

The Markit/CIPS UK Construction Purchasing Managers’ Index^® (PMI^®) came in at 57.8 in March 2015. This is down slightly on February 2015 (60.1) and the 2014 average (61.8), but still far above the 50.0 no-change mark.

Generally, construction output remained strong in March although growth rates slowed. The pace of growth in all three sub-sectors eased. The best performance was seen in the housing sector, followed by commercial construction, with civil engineering coming in last. Similarly, new business volumes increased in March but at a slower rate of expansion.

The job creation growth rate was higher than the long-run survey average but at its slowest pace since December 2013.

Promisingly, some 57% of those surveyed expected output to improve over the next 12 months, with just 3% forecasting a decline. This is the strongest feeling of optimism recorded since February 2006.

“The construction sector’s strong recovery took on a gentler, quieter pace, with the housing sector continuing to lead the way ahead – but only just, and with the commercial sector a close second,” commented David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply.

“A hint of restraint prevented employment levels rising much further. Some firms attributed slower momentum to concerns about the looming General Election, but new business still rose at a respectable pace compared to the average over the last few years.

“Strong demand for construction materials was a key development and though major shortages are not yet apparent, there is some evidence that suppliers of construction materials must up their energy levels to quicken delivery times and raise capacity.

“The main takeaway from this month must be the highest levels of confidence seen in the construction sector for almost a decade. Though there may be some low-level obstacles still to come, the sector gets the green light as there is evidently belief that the future for the construction sector is a sustainable one,” concluded Noble.

Read the article online at: https://www.worldcement.com/europe-cis/07042015/uk-construction-output-strong-but-slower-expansion-rate-march-2015-642/