The building trade is shrugging off political turmoil and wobbling economic sentiment to grow much faster than analysts were expecting.
Today the Purchasing Managers’ Index for November came in at 53.4 — better than the market expected and beating the figures for October. This was dubbed “an early and unexpected Christmas present”, for the sector and the wider economy.
Any number above 50 indicates growth. Many had expected the construction sector to plunge into recession given ongoing Brexit turmoil.
Tim Moore, at IHS Markit, which compiles the survey, said: “November data indicates that the UK construction sector remains in expansion mode, with resilient business activity trends seen for housing, commercial and civil engineering activity. The latest overall rise in construction output was the fastest since July, helped by a stronger contribution to growth from house-building activity.”
Blane Perrotton, managing director of property consultancy and surveyors Naismiths, said: “The construction sector has received an early — and unexpected — Christmas present. Months of see-sawing demand have settled into a semblance of stability and steady growth.”More staff are being hired and demand is such that pay is rising, say top construction employers.
Orders are growing and levels of optimism in the building game have rebounded. A fall in oil prices has helped. But caution remains, with the spectre of the collapse of Carillion a year ago still looming over the trade.Jonathan Garrett, associate director in Lloyds Bank Commercial Banking’s infrastructure and construction team, said: “The uptick in the index will lift the spirits of some in construction at a time of uncertainty. As a UK-focused sector exposed to the cycles of the economy, there is undeniably a sense of nervousness and firms are in defensive mode, cutting costs wherever possible.”The construction trade has won praise from the Bank of England for being among the best prepared for Brexit.
Source:Evening Standard. Simon English https://www.standard.co.uk/business/christmas-comes-early-for-uk-builders-as-the-sector-shrugs-off-political-turmoil-a4007881.html