Construction boost all thanks to housing
The construction of new homes has been gathering pace in the UK and new data has shown it is entirely responsible for the overall growth of the construction sector.
According to the Purchasing Managers Index (PMI) from Markit and the Chartered Institute for Purchasing and Supply (CIPS), growth increased by its fastest level in five months, with the PMI reading of 53.1 comparing favorably with the previous month's 50.8. Any reading over 50 denotes growth.
This growth is the sort that has kept insulation fitters busy, as the fastest housing output increase in five months has has been the "primary driver" of growth, CIPS director of customer relationships Duncan Brock noted.
While housing construction booms, the effects of Brexit have borne down on other areas of activity, particularly commercial building. Many investors are not willing to make major decisions at a time when the UK's economic future is up in the air and as a result this sector is in the doldrums. Civil engineering has also just seen its third successive month of contraction, although this sector can at least look forward to major upcoming projects, such as HS2 and Hinkley.
The report summarised the contrasting situation in these words: "House building projects were again the primary growth engine for construction activity. Survey respondents suggested that resilient demand and a supportive policy backdrop had driven the robust and accelerated upturn in residential work."
This extra support coming from the government was also noted by associate director at IHS Markit and co-author of the report Tim Moore. He pointed to the influences of "strong demand fundamentals and a supportive policy backdrop".
While the former is a result of a lack of supply, the latter is represented by a range of recent government policy initiatives.
Chancellor Philip Hammond announced £44 billion of support to help increase the output of new homes to 300,000 a year by the middle of the 2020s, and specific schemes include £25 million announced by housing minister Alok Sharma this week to help local authorities kick-start local projects.