It’s not long since we were looking at the results of our survey into the impact of Covid-19 on the construction and property markets. Because of the timing of the survey, there were a lot of comments which reflected the frustration of many in the industry about their inability to get back to work, especially, in a few cases, compared to England where construction was allowed to continue throughout lockdown. However, I was really heartened to see the June HIS/Markit/CIPS survey for construction in the UK. Of course, this may reflect the fact that England has been ahead of us here in Scotland, but the fact is that the UK IHS Markit/CIPS Construction PMI jumped to 55.3 in June 2020 from 28.9 in the previous month. Anything over 50 indicates growth and this result was higher than the figure expecte(d 47.0). In fact, it shows the steepest increase in construction output since July 2018. Residential construction work led the way, expanding by the most in almost five years, but it was supported by both commercial work and civil engineering activity which also returned to growth. Crucially, purchasing activity rose at the fastest rate since December 2015 and, although new business volumes increased only marginally, employment continued to fall. That said, business confidence remained low, but was still at its highest since February.
This chart below, taken from ‘Trading Economics’ shows both the extent of the fall during the crisis and the almost staggering size of the rise in the last month.
Can these figures really be right? Given they are coming from one of the most respected sources around, I would be amazed if they are not. That said, I suspect that the same study, carried out for Scotland as opposed to the UK as a whole, would not be quite so impressive. Nonetheless, it’s a cheering sight!
Chris Peace, MD, Peace Recruitment