‘A sustained rebound in residential building provides an encouraging sign that the recent soft patch for property values has not deterred new housing supply.’ — Tim Moore, IHS Markit
Construction activity rose at the fastest pace since the end of 2015 last month, a private survey showed on Friday. Markit/CIPS reported that its Purchasing Managers’ Index for the UK construction sector came in at 56.0 in May, following the preceding month’s 53.1. Meanwhile, market analysts anticipated a decline to 52.7 points during the reported month. The construction sector accounts only for about 6% of the UK economy. Nevertheless, May’s construction and manufacturing PMI survey suggested that the economy gained positive momentum in the second quarter. Friday’s data showed that housebuilding climbed at its fastest pace since December 2015, with commercial construction rising at the strongest rate since March 2016. Markit also highlighted that British builders employed more people and ordered more raw materials to cope with surges in order inflows. Despite the stronger-than-expected PMI for both construction and manufacturing sector, Monday’s release of the PMI for the services sector will provide a clearer picture of the British economy, as services activity accounts for about 70% of the economy.
