'Brakes are off' for building firms as growth rebounds


Britain's builders enjoyed a surge in work last month as growth rebounded to a seven-month high, according to new figures.

The latest Markit/CIPS UK construction purchasing managers' index (PMI) showed a reading of 53.1 in June, up from 52.5 in May and the highest since November.

New orders also rose at the fastest pace since May 2017, the survey said.

Housebuilding remained the best performer in the sector, although the report also said commercial building work helped drive the pick-up in activity.

It marks the third month in a row of sustained recovery since the Beast from the East disruption in March, which hit building sites hard.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS), said: "With the fastest rise in new orders since May 2017, it appears the brakes are off for the construction sector.

"Despite being hampered by economic uncertainty, firms reported an improved pipeline of work as clients committed to projects and hesitancy was swept away."

But he said the sector was "not out of the woods yet" as the report also showed that confidence among building firms remained lower than average in June, while price inflation also hit a nine-month high.

"A cloud of uncertainty remains, given the sector's hit-and-miss performance so far this year and lower-than-average business confidence in June," said Mr Brock.

The construction sector saw activity slump amid the snow disruption earlier this year, but official figures on Friday revealed it was not as bad as first feared.

The Office for National Statistics (ONS) revised up economic growth to 0.2% in the first quarter, from the 0.1% first estimated, as output from Britain's construction sector came in higher than previously estimated.

The latest PMI figures fuel expectations for a bounceback in the economy in the second quarter, which will reinforce the case for an interest rate rise potentially as soon as the Bank of England's next decision in August.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The pick-up in the construction PMI in June indicates that the sector no longer is in retreat, but the near-term outlook remains bleak."

"The outlook for commercial work hinges on the Brexit talks, which likely will become increasingly acrimonious over the coming months before common ground is found," he added.