UK PMI construction rose to 50.5 in April, up from 49.7 and beat expectation of 50.5. Markit noted that construction output rises for the first time since January. Residential work expands at fastest pace for four months. However, civil engineering and commercial activity fall again.
Tim Moore, Associate Director at IHS Markit, which compiles the survey:
“A return to growth would normally be considered a positive month for the UK construction sector, but the weakness outside of house building gives more than a little pause for thought. Commercial activity and civil engineering both remained on a downward path in April as political uncertainty led to delays with spending decisions.
“Residential work retained its position as the sole driver of growth across the three main segments of construction activity. Survey respondents once again noted that residential projects were buoyed by strong demand for new homes, low mortgages rates and firsttime buyer incentives.
“On the supply side, sub-contractor availability worsened and construction firms continued to report low stocks among suppliers in April. Latest data revealed the greatest lengthening of lead times for construction inputs since February 2015, reflecting ongoing capacity pressures across the supply chain.
“The forward-looking survey indicators remain subdued, with the UK construction sector recording a drop in business optimism during April and the largest fall in new work for over one year. A lack of new work has started to impact on staff recruitment, as signalled by a reduction in payroll numbers for the first time since July 2016. This provides another signal that construction firms are bracing for an extended period of soft demand ahead.”
