Recently in the UK there has been a lot of uncertainty, when it comes to the construction industry and the work it may receive. This is down to many factors with the largest being the vote to leave the European Union. Especially in the construction industry, companies have been worried about how this will affect them in the short and long term. Small companies have even been worrying about going out of business altogether.
With the announcement of the Brexit vote the British pound has fallen in value which has caused the cost of supplies for the construction trade to increase, most of these costs have been passed onto the customer. This was expected to discourage jobs and projects as stated by remain voters.
However this has not been the case, there has been an increase in orders and growth in construction output. The construction industry has seen its highest order growth in 11 months which includes pre-Brexit vote. This is a huge achievement but companies are still struggling with the straining cost pressures caused by the devalued pound. The input costs for the construction industry have also rose at their fastest rate since April 2011.
The Purchasing Managers Index (PMI) is the measure on which economists measure the growth of the construction industry. On this scale, anything above 50 indicates that there is growth in the industry. The index was at 52.8 in November and then rose to 54.2 in December, this has exceeded economists’ expectations of 52.6.
Construction output for the industry has had a solid rebound in the final quarter of the year. All three sectors of the construction industry have started to recover from the hit that they took in summer. Although these increases are promising they are still not up to the peak growth levels in 2014.
House building seems to be the main driver of growth for the construction industry currently with the largest construction output.
Do you work in the construction industry? How has business been for you since the devaluation of the pound?
Let Fairport know in the comments below.
