Construction ‘white hot’ as growth at seven year high
Work is flooding in and creating jobs
Construction output was described by one analyst as moving “from hot to white hot” as new figures show it growing at its fastest rate for nearly seven years.
IHS Markit’s Construction Purchasing Managers’ Index (PMI) for May shows growth was fastest in the housebuilding sector followed by commercial work and civil engineering.
However, raw material prices are also increasing to levels not seen since 1997, adding to inflationary pressures.
The survey found that the increase in work on commercial projects was the steepest since August 2007, reflecting strong demand conditions following the reopening of customer-facing areas of the UK economy.
The PMI recorded a score for the sector of 64.2 in May against 61.6 in April. Anything above 50 is seen as growth. It marks the fourth consecutive month of growth for the sector.
Employment growth in construction firms was the highest since 2014, with demand for staff surging to a record pace in May.
The survey added to signs that the economy is on track for a swift rebound after shrinking 10% last year.
Thousands of projects had been delayed due to the Covid crisis but optimism that the pandemic’s end is in sight has seen many resume.
Gareth Belsham, director of property consultancy and surveyors Naismiths, commented: “Demand has gone from hot to white hot.
“With new orders flooding in at the fastest rate on record, Britain’s builders are scrambling to keep up.
“There’s a boom in hiring and the use of sub-contractors is surging at the fastest pace ever seen.”
Howard Archer, chief economic advisor to the EY ITEM Club, added a warning note: “Stretched supply chains and rises in raw material prices led to input prices rising at the fastest rate in the survey’s history of just over 24 years.
“This will undoubtedly add to mounting inflationary concerns.”