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Boom in UK construction industry continues



Construction in Britain experienced its slowest pace during May. However, according to economists there is a strong outlook in view of the house building boom. 
The Markit/CIPS construction PMI, which measures the levels of building activity, declined from 60.8 to 60 in May. This reflected a slowdown in growth in commercial space. The figure was still above 50, which indicates contraction from expansion.

The Chief UK Economist at Berenberg, Rob Wood, said construction is still booming and experienced a recession due to the cutting of investment projects by the government and the crash in the housing market. However, low interest rates, increasing house prices and increased confidence is boosting the market. According to Wood, a growth boost is expected in the second quarter.

According to Tim Moore, a Senior Economist at Markit, the UK construction market is in its strongest expansion phase since 2007. Survey respondents cited another expected surge in new house building during May.

A sign of increased momentum among builders is the fact that employment in this sector has risen for 12 months in a row. However, the availability of subcontractors has fallen sharply.


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