UK constructions rebounds in April led by strong house building recovery
The UK construction sector has bounced back to a five-month high, led by a strong performance in house building, according to the latest IHS/Markit purchasing managers survey.
The seasonally adjusted index came in at 52.5 for April, a sharp upturn from the 20-month low seen in March of 47.0, due largely to the winter storm known as the Beast from the East which hampered construction.
The survey revealed that residential work was by far the best performing category last month, with the rate of growth reaching its strongest since May 2017.
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However, the report cautioned that there were still signs that "demand across the construction sector remained subdued, with total new work rising only marginally in April".
Tim Moore, associate director at IHS Markit said: “A rebound in construction activity was pretty well inevitable after snowfall resulted in severe disruptions on site during March. However, the picture was less positive in other areas of construction, with commercial building and civil engineering work rising only marginally.”
Read more: UK construction continues to tumble
Still, Brendan Sharkey, head of construction and real estate at MHA MacIntyre Hudson, argues that weakening demand in London is skewing construction performance nationally:
“Todays figures may give the impression the sector is flat-lining but the truth is that outside of London the housing market is ticking over nicely. The capitals property market has reached a tipping point and the bubble is running out of the city into the hillsides to cater for pent-up demand in the provinces.”
Prior to the near two-year low in March, the index had been up at 51.4 in February and 50.2 in January. Still, the slump in March pulled the overall quarter average to 49.5, down from 52.0 in the fourth quarter of 2017.
“The construction sectors difficulties in recent months has clearly been influenced by economic, political and Brexit uncertainties fuelling clients caution over committing to new projects,” said Howard Archer, chief economic advisor at EY ITEM Club. “Lacklustre economic activity in some sectors of the economy (such as retail) has also weighed down on construction, as has a shortage on new infrastructure projects."
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