UK construction sector bounces back after storm dubbed ‘beast from the east’
As a leading supplier to the construction industry, Mone Bros welcomes the news that April has seen significant improvements in the house-building sector, following a sudden drop caused by storms throughout March. The weather in the early part of the year was so bad, that many construction sites had to be temporarily shut down, as storms labelled ‘the beast from the east’ wreaked damage and destruction across the country. The Markit/Cips UK construction purchasing managers’ index shows a welcome recovery for the house-building sector due to improved weather conditions in April.
Mone Bros is encouraged to see that figures obtained from a survey of 170 construction firms show that the worst effects of the harsh winter are behind us, and the construction industry may now start to see increasing growth. Civil engineering projects, and other commercial construction work showed only a modest recovery, but house-building figures are more encouraging, showing the biggest increase for two and a half years.
With construction accounting for 6% of the economy overall, the purchasing managers’ index is used as a key indicator by the Bank of England. While recovery in April was seen as inevitable after such a disastrous winter for the construction industry, the unexpectedly strong figures for house-building have helped lift the pound from a four-month low against the US dollar. Figures from the recent survey showed that following a dramatic fall from 51.4 in February, to 47 in March, April saw a rise to 52.5, with a target of 50 or above indicating growth in the sector.
Samuel Tombs, the chief economist at Pantheon Macroeconomics, warns against undue optimism, though, commenting that uncertainty over the UK’s position with regard to the EU is still reducing confidence in investment in longer-term construction projects. He warns that the government’s planned 5.4% year-over-year reduction in gross investment in the public sector this fiscal year will further hamper recovery for the construction industry as a whole.
Mone Bros welcomes the current upturn in figures for house-building, and hopes to see increasing improvements for the wider construction industry in the coming year.