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Summary
- The IHS Markit-CIPS construction PMI recorded a value of 61.6 in April.
- Firms recorded good growth particularly in the segments of housebuilding, commercial activities, and civil engineering.
- The survey findings indicate that the British economy seemed on track for a quick recovery.
The IHS Markit-CIPS (Chartered Institute of Purchasing and Supply) UK construction purchasing managers' index (PMI) recorded a value of 61.6 in April this year as new orders poured in with easing of coronavirus-related restrictions across the nation. A PMI reading above 50 indicates expansion in economic activity for the sector, while a reading below 50 indicates a contraction in output.
The latest PMI data suggests that construction firms recorded good growth particularly in the segments of housebuilding, commercial activities and civil engineering work. The month of April saw the highest jump in overall number of new orders since the month of September 2014.
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The temporary stamp duty holiday added to the rising housing demand, said the survey. Tim Moore, Director, Markit Economics, said that the British construction industry saw its fastest growth period for six-and-a-half years. A robust demand for housing property coupled with a strong delivery of infrastructure programmes pushed up the growth momentum, he said.
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Overall economic rebound on cards
The construction PMI recorded in the previous month was almost the same at 61.7 points. The all-sector PMI also displayed an expansionary trend. The all-sector PMI that adds up and averages out the values of PMIs for services, manufacturing and construction in the UK, was valued at 60.8 points in April. For March it was 56.8. The IHS Markit-CIPS survey indicated that the British economy seemed on track for a quick recovery in the total national output. On Thursday, the Bank of England revised its forecast for the British GDP to 7.25 per cent for 2021, up from 5.0 per cent made in February.
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Rising costs
Inputs cost for construction companies in the UK rose at their highest rate in April since the PMI records began by IHS Markit 24 years ago. In fact, the rate of construction cost increased had grown for the seventh consecutive month in April.
The rise was triggered by factors such as increasing transportation cost and demand-supply imbalances, apart from others, suggested the survey results.
Must Read: UK construction output in March expands at sharpest pace since Sep 2014: Survey
Employment growth
The survey results pointed out that the British construction firms saw the highest growth in employment for the month of April 2021 since the late 2015.
