According to the Purchasing Managers’ Index (PMI) by Markit/CIPS, the UK’s construction industry is picking up the pace, despite the soaring costs and reductions in new orders. This is due to a strong activity in the engineering sector.
The Markit/CIPS survey shows that construction has increased from 52.2 to 52.5 in the month of January. While growth in housing and commercial buildings has been hindered over the past months, it was outweighed by the development projects of civil engineering firms.
Basically, there was an uncertain outlook by Travis Perkins (TPK.L), a prominent supplier of building materials in the region. Its CEO John Carter said:
“The sharp decline in the value of sterling since June 2016 has created cost pressures on imported goods and materials, and the expectations for secondary housing market transactions and growth in the repair, maintenance and improvement market have weakened.”
Nevertheless, there is still optimism among British construction companies, as activity hits a 13-month peak during the start of this year. Also, the Bank of England, which is closely watching the region’s economy, has predicted a growth of 2.0%, which is more than other economists have forecast.
The bank added that the industry can also expect housing investments to grow by 3% this year, though this is a point short to the 4% growth rate experienced in 2016.