Rise in Housebuilding Boosts Construction Sector in May
A recent survey has confirmed that activity in the UK construction sector expanded at its fastest rate in 17 months in May, boosted by a surprise rebound in homebuilding.
Several Economists had backed the UK's construction sector to recover well, even after its slow start to 2017. They were proved right when the Markit/CIPS Construction Purchasing Managers' index increased from 53.1 to 56, the highest level its been since December 2015, with anything over 50 indicating growth.
"A sustained rebound in residential building provides an encouraging sign that the recent a soft patch for property values has not deterred new housing supply," said Tim Moore, senior economist at IHS Markit. "Instead, strong labour market conditions, resilient demand and ultra-low mortgage rates appear to have helped boost work on residential development projects."
There had been a concern that the index figure could have decreased, due to increasing caution from lenders and homebuyers alike.
Nationwide had said house prices had fallen for a thrid consecutive month in May - the longest run of decline since 2009, just after the financial crisis. There had also been some bad news from the Bank of England, who reported that loan approvals had fallen to a seven-month low in April.
However, the recent survery found there had was a consistent increases across the whole construction sector in May, even in civil engineering and commercial projects.
The general feeling is that the UK construction industry is performing as well as can be expected under current circumstances, during the on-going Brexit negotiations and a weak pound, which is a promising sign for anyone in the industry.