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UK construction industry rebounds in February: PMI

FILE PHOTO: Trains pass near construction work taking place around Battersea Power Station in London, Britain, May 22, 2018 . REUTERS/Toby Melville

LONDON (Reuters) – Britain’s construction industry perked up more than expected in February, helped by a return to growth in the commercial sector as businesses gave the green light to projects suspended earlier in the COVID-19 pandemic, a survey showed on Thursday.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index rose to 53.3 from 49.2, moving above the 50 threshold for growth. A Reuters poll of economists had pointed to a reading of 51.0.

“The rebound was supported by the largest rise in commercial development activity since last September as the successful vaccine roll-out spurred contract awards on projects that had been delayed,” said Tim Moore, economics director at financial data company IHS Markit.

“House-building is still the engine of recovery for the construction sector, although there was a loss of momentum since January as adverse weather and longer wait times for materials contributed to some temporary delays on site,” he added.

Britain’s housing market has boomed during the coronavirus pandemic, spurred by demand for more spacious properties and a tax break which finance minister Rishi Sunak extended for up to six months for some home-buyers in Wednesday’s budget statement.

The survey showed purchasing costs for construction companies rose at the fastest pace since August 2008, reflecting global shipping shortages and demand for raw materials.

Timber was in particularly short supply, IHS Markit said.

The all-sector PMI, which combines the construction survey with readings for the much larger services and manufacturing sectors published earlier in the week, rose to a two-month high of 50.0 in February from 42.0 in January.

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