Britain’s struggling construction jobs sector seems to have climbed out of recession in November as a surge in house building came to the ailing industry’s rescue.
Commercial and civil engineering designing work is still contracting, yet the rise in residential construction has dragged optimism in the industry up from its current five-year lows.
The purchasing managers’ index, an influential private segment survey compiled by IHS Markit, rose to 53.1 in November, up from 50.3 in October.
Any score of over 50 indicates growth, so the sector appears to have moved from stagnation to modest growth. That is a substantial improvement from the nadir of 48.1 in September.
Construction Sector Returns to Growth 2017
Official information demonstrated the business by 0.5pc in the 2nd quarter of 2017 and 0.9pc in the 3rd quarter – a couple of negative results which put the construction jobs sector into recession. But the recovery in survey data could indicate that recession is now over.
“The survey suggests that the construction activity could squeeze out unassuming growth in the fourth quarter,” said Howard Archer, chief economic adviser to the EY Item Club. He does not expect any fast recuperation as companies hold off making big investments.
Extended tepid economic activity and heightened economic, political and Brexit uncertainties are clearly hampering the construction sector.
Clients are particularly cautious over committing to major construction projects. But if this uncertainty is cleared up, other analysts think growth could pick up.
Samuel Tombs at Pantheon Macroeconomics : “Looking forward, continued support from relatively low home loan rates, the Help to Buy Scheme and other housing policy initiatives should ensure that housing maintains momentum”
Meanwhile, signs that the Brexit divorce terms will be agreed imminently, enabling future relationship talks to begin, might help corporate confidence to recover.”