UK construction industry shows signs of revival

 
Jessica Morris
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Construction rebounded in May, although it had a long way to come from April's dismal figure (Source: Getty)

Construction bounced back in last month, new data has shown, with the Markit/CIPS UK Construction Purchasing Managers’ Index registering 55.9 in May.

The figure beat forecasts and remained way above the 50 threshold which indicates growth.

However, the sector still has a long way to go after April's dismal reading of 54.2 - although optimism is high following the Tories' win in the General Election.

"With a sustained period of policy uncertainty no longer on the horizon, business confidence surged back to its highest level since early 2006," Tim Moore, senior economist, said.

Construction companies recorded a slight rebound in output growth last month, or the first since Feburary, although this only partially reversed the loss of momentum seen in April ahead of the general election.

Nevertheless, business confidence across the construction sector rose to its highest level since February 2006. Respondents said employment levels were supporting a post-election bounce in clients’ willingness to spend.

And additionally hiring accelerated at the fastest rate in five months during May.

"However, it is far from certain whether the relief rally in construction confidence will usher in a lasting turnaround in output volumes on the ground," Moore said.

"Despite a client spending rebound in May, all three key areas of construction activity have lost considerable momentum over the past 12 months."

"The scale of the construction slowdown since 2014 is such that it will not be fully reversed through the release of pent up demand after the election alone."

Data released last week showed construction output fell by 1.1 per cent in the first quarter of this year, having already shrunk 2.2 percent at the end of 2014.

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