Is Britain bouncing back? The construction industry is growing fastest again for two years after EVER taking the worst dive during the coronavirus lock
- The construction industry returned to growth last month according to the main index
- The PMI measure came in at 55.3 with slightly above 50, meaning the sector is expanding
- Uptick follows the lowest rating in history in April, as lockdown caused unrest
There was more evidence from a UK bounceback of the coronavirus blockage today with signs that the construction industry has grown again.
The meticulous PMI index rose to 55.3 last month, up from just 28.9 in May and a record low of 8.2 in April. Anything over 50 on the IHS Markit / CIPS measure means an increase in activity.
The figures suggest that after closing the economy, the economy drags to fight the deadly disease.
The country is facing the worst recession in 300 years, fearing millions of people will remain unemployed. However, the Bank of England has shown a glimmer of hope that the recession may not be as deep as initially feared.
Chancellor Rishi Sunak will unveil plans on Wednesday to back jobs in a mini-budget, after Boris Johnson eased the blocking over the weekend so shops and hospitality can get to work.
The well-tracked PMI index rose to 55.3 last month, up from just 28.9 in May and a record low of 8.2 in April
The influential survey of purchasing managers found the highest growth rate for the construction industry since July 2018, as supply chains were reopened following interruptions and business closings.
About 46 percent of respondents to the survey reported an increase in activity in residential construction, while only 27 percent said they experienced lower activity.
Commercial and civil engineering activities also increased again in June, although expansion rates were lower than those for residential construction.
The number of new business activities rose slightly for the first time since February.
However, it said the pace of new order growth was slower than the overall improvement in business activity, as companies reported “hesitation with customers and longer lead times to acquire new contracts.”
Employment also declined due to concerns about the long-term outlook for demand, resulting in cautious recruitment policies and, in some cases, layoffs as leave arrangements expired.
Tim Moore, director of economics at IHS Markit, said, “The June survey data showed a strong recovery in UK construction production as more sites began to reopen and the supply chain got underway.
“As the first major part of the UK economy to begin a phased return to work, the strong rebound in construction activity provides hope for other sectors that have suffered from the closing period.”
Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS), said, “Just two months ago, the construction industry delivered the worst results in PMI history, and there are still some potholes to navigate around as government aid for jobs is taken away.
Employment levels remained low, with reports of layoffs, layoffs and reluctance to increase the workforce when new order levels remained flat.
“But with a sharp rise in headline output, it seems that all the building blocks are there for the increasing health of the sector.”
Chancellor Rishi Sunak (pictured right when visiting Boris Johnson last month) will reveal plans to support jobs in a mini budget on Wednesday