Industry News

Will the sun shine on UK construction this summer?

Fair weather conditions are helping the UK construction industry to recover from the disruption of the unsettled winter of 2018, but there is some doubt over how long this uplift will last. Actuated Valve Supplies have produced a round up of the construction industry at present.

According to the IHS Markit/CIPS UK Construction Purchasing Managers Index in June, total activity in the industry was given a boost by companies catching up on work schedules delayed during the winter.

This follows months of severe weather conditions, including the so-called Beast From The East and a less severe, although still disruptive, Easter weekend.

With a more settled outlook in May, the seasonally adjusted PMI stood at 52.5, unchanged since the previous month, but a sign of improved trading in the sector.

The report, published in early June, stated: “The figure was indicative of a moderate increase in total activity, albeit one that was subdued in the context of historical data.

“Some firms suggested that unusually good weather conditions had supported activity and enabled them to continue catching up after prior months’ weather-related disruptions.”

Within the three market segments – residential, commercial and civil engineering – there were various reasons to be optimistic, with residential remaining the largest contributor to the sector as a whole.

Both civil engineering and commercial projects recorded positive growth for the second month running, with the latter achieving greater expansion than in April.

While residential growth was a little slower, this came off the back of a substantial pickup in activity in April, as the snowfall of winter cleared.

Several causes for concern are keeping optimism for future months lower than it might otherwise be, including a shortage of skilled staff, high price inflation on purchasing costs, and supply chain issues leading to longer delivery times for parts and materials.

The report’s author Sam Teague said: “Activity in May was once again buoyed by some firms still catching up from disruptions caused by the unusually poor weather conditions in March, and a renewed drop in new work hinted that the recovery could prove short-lived.”

A score of 50.0 on the UK Construction PMI indicates no change in the size of the sector – so although the score of 52.5 is the same as in April, it still represents modest positive growth.

Commercial activity growth hit a three-month high, while residential kept its position as the largest segment for the third month running, despite falling back slightly from April’s 11-month high expansion rate.

New order books are down, however, for the fourth time in five months, with future growth optimism standing at a seven-month low in May, and this muddled picture is an indication of the uncertainty surrounding economic and political issues at present.

With the summer expected to remain settled for a considerable time to come, conditions are right for good performance in UK construction – if the demand is there.

But with May’s growth stemming largely from projects delayed by previous bad weather, UK construction firms will be working hard to capitalise on the new orders that come in and to drive profits while the sun shines.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *