UK Construction Bounces Higher, But It’s Only Making Up For Q2
Construction activity is surging in the UK as the economy reopens
During the lock-down months, the manufacturing and particularly the service sectors went through a deep contraction. Although, the deepest contraction was in construction, with activity falling considerably and the PMI indicator declining to just 8 points. But, it bounced back in June and it bounced even higher in July, as today’s report showed. Below is the construction report for July, as well as the commentary from the surveying firm Markit:
UK July Construction Report
- July construction PMI 58.1 vs 57.0 expected
- June construction PMI 55.3
“Construction companies took another stride along the path to recovery in July as a rebound in house building helped to deliver the strongest overall growth across the sector for nearly five years. Civil engineering and commercial activity are also back in expansion, which has been mainly due to the restart of work that had been delayed during the second quarter of 2020.
“Survey respondents noted a boost to sales from easing lockdown measures across the UK economy and reduced anxiety about starting new projects. However, new work was still relatively thin on the ground, especially outside of residential work, with order book growth much weaker than the rebound in construction output volumes.
“Concerns about the pipeline of new work across the construction sector and intense pressure on margins go a long way to explain the sharp and accelerated fall in employment numbers reported during July. This shortfall of demand was mirrored by the fastest rise in sub-contractor availability since
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