The Markit/CIPS construction Purchasing Managers’ Index (PMI) surged to 64 in August from 62.4 in July, surprising economists who had forecast a fall. It is now the 16th consecutive month that the index have been higher than 50 which indicated growth.
This has been surprising as the industry is suffering from the slowest delivery of materials by vendors since 1997! Markit said the fast pace of the industries growth has created a supply problem, with the availability of both construction materials and sub contractors stooping at the quickest pace since the survey began in 1997.
David Noble, Group Chief Executive at the Chartered Institute of Purchasing & Supply said, “The sector is struggling to find enough skilled tradesmen to keep pace with new work and the labour market will continue to put pressure on costs until the next wave of apprentices begin to enter the jobs market.” said
The sector, which was hit hard in the financial crisis, began to grow strongly last year, helped by low interest rates and government programmes aimed at boosting demand, as well as the broader economic recovery.
Growth in the sector in August was broad-based, with residential housing, commercial building and civil engineering activity all seeing strong increases. Residential construction performed the strongest of the three, although the pace of expansion slowed slightly.
Despite the increases, the construction of new homes remains below levels needed to meet demand.
Stefan Friedhoff, Global Corporates Managing Director for Construction at Lloyds Bank Commercial Banking, said it was “vital” that the current momentum was maintained. He went on to say, “the true proof of a return to normality will be in activity spreading from a consistently buoyant London out to other regions of the UK”.
Recipro UK sourced this article from the BBC Website.