Finance

UK construction keeps up rapid growth in April as lockdown lifts – PMI By Reuters

© Reuters. FILE PHOTO: Construction workers build a new house in Aylesbury, Britain August 6, 2020. REUTERS/Matthew Childs

LONDON (Reuters) – British construction activity expanded quickly last month, almost matching the six-and-a-half-year record struck in March as a lifting of coronavirus lockdown measures boosted new orders, a survey showed on Friday.

The IHS Markit/CIPS Construction Purchasing Managers’ Index (PMI) eased to 61.6 in April from 61.7 in March, despite the survey’s gauge of new orders rising to its highest level since September 2014.

A Reuters poll of economists had pointed to a reading of 62.3.

“The UK construction sector is experiencing its strongest growth phase for six-and-a-half years, with the recovery now evenly balanced across the house building, commercial and civil engineering categories,” said Tim Moore, economics director at data company IHS Markit, which compiled the survey.

Overall the survey added to signs that the economy is on track for a swift rebound. On Thursday the Bank of England said Britain’s economy, which last year shrank by almost 10%, would grow by the most since World War Two this year.

The all-sector PMI, which combines the PMI surveys for manufacturing, services and construction surveys, rose to 60.8 in April from 56.8 in March, the highest since October 2013.

IHS Markit said that in the construction sector, civil engineering showed its fastest growth since 2014 while the expansion cooled off in the commercial and housebuilding sectors. The latter was boosted by a housing market boom spurred in part by a temporary cut to property purchase tax.

Cost pressures for construction firms increased at the sharpest rate since records started 24 years ago.

“Supply and demand imbalances for construction items, alongside higher transport costs, resulted in severe price pressures across the board during April,” Moore said.

Employment growth in construction companies was the highest since late 2015, the survey showed – chiming with a Recruitment and Employment Confederation report that showed a rapid increase in demand for staff from employers.

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