Britain better builds back! Construction booms fastest in seven years amid rising residential and commercial projects
- The numbers paint a healthy picture of a resurgent economy
- The data from the services and manufacturing sectors was also strong
The UK construction sector is growing at its fastest rate in nearly seven years amid a surge in residential and commercial construction.
The closely monitored construction purchasing manager index showed that production growth in May reached 64.2, the highest level since September 2014.
That was up from 61.6 in April and the fourth straight month of construction growth – any value above 50 indicates expansion.
Construction boom: The construction purchasing manager index showed 64.2 in May. the highest level since September 2014
The data is the latest sign that the UK’s swift recovery from the pandemic is recovering after its service and manufacturing PMIs rose sharply earlier this week.
The numbers paint a healthy picture of a resurgent economy.
Douglas McWilliams, vice chairman of business advisory services for the Center for Economics and Business Research, said, “I predicted this was going to happen earlier this year, and now others are starting to come.
‘The economy is recovering very strongly and has exceeded most expectations. Not only has the consumer started to spend money, but inter-company business has been good, which people hadn’t predicted. ‘
The May manufacturing PMI, released earlier this week, showed conditions in the sector were improving at an unprecedented rate, at 65.6.
The work backlog rose to its highest level since the survey began in 1994, and there was a record increase in workforce as factories restarted after the Covid lockdowns.
And in the services PMI, which spans industries from banking to retail to hospitality, a score of 62.9 indicated the fastest production rate in 24 years as the country began to be released from its lockdown shackles.
Another sign that life is returning to normal, according to the SMMT industry association, new car sales rose by 674.1 percent in May compared to the previous year. We closed.
And a report on jobs from KPMG and the Recruitment & Employment Confederation showed that labor demand rose across the UK as fast as it had in more than 23 years in May.
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Job vacancies were at their highest level since January 1998 – but the pandemic meant far fewer people were available to fill these positions.
Overall availability fell the fastest since May 2017.
Many younger people who lost their jobs at the start of the pandemic have moved back in with their parents, often moving away from the cities, while thousands of overseas workers have gone home.
This has created a worrying shortage of staff in companies that rely on this workforce, particularly in hospitality businesses such as pubs and restaurants.
KPMG’s Claire Warnes said: ‘We need companies and recruiters to work with the government to urgently close the skills gap by helping candidates and employees learn and retrain to take on new roles.
“This will be critical to our recovery from the pandemic.”
But hopes for a UK recovery have been dampened by rising inflation worries or rising cost of living.
The increased demand has resulted in supply chains being “stretched” and the cost of raw materials skyrocketing.
The construction PMI showed that business costs rose the fastest since records began 24 years ago.
Max Jones, director of the infrastructure and construction team at Lloyds Bank, said: “A recovery driven by backlog is not without risks.
‘What could not be overlooked in the last month is the strain on the supply of key materials and the associated price increases.
“Many dealers are now limiting the amount contractors can buy, stifling long-term planning.”