Construction now at 15-month high
The monthly purchasing managers index found new business expanded at one of the fastest rates in the survey’s history, rises in workloads encouraging further job creation and sentiment regarding the 12-month outlook still elevated.
The PMI, a seasonally adjusted index designed to track changes in total construction activity, rose to 63.6 in May from 61.3 in April. Any reading over 50 is an expansion in activity.
The reading signalled a substantial monthly increase in construction activity, and the fastest since February 2016. Activity has now risen in each of the past 45 months.
The latest expansion was linked to improving market conditions and higher new orders, with some panellists highlighting particular strength in housing, the bank’s chief economist said. Simon Barry added the recently flatlining civil engineering sector was also showing signs of life.
“Residential construction recorded a marked acceleration in activity, with this month’s housing activity index representing the second-fastest rate of expansion in the survey’s 17 year history. There was also a sharp acceleration in commercial activity which took the commercial PMI to its highest level in 10 months. Civil engineering, despite that it continued to lag behind the other sectors, also edged higher in May to record a second consecutive month of positive growth,” he said. Those surveyed were optimistic about the future, Mr Barry added. New business has risen on a monthly basis for almost four years, the survey found.
“Survey respondents remained strongly optimistic about the year ahead with companies predicting further rises in new orders should sustain favourable dynamics in construction activity over the near-term,” he said.
More than a quarter of survey respondents reported taking on extra staff, broadly in line with that seen in the previous month. Close to 55% of respondents forecast a rise in activity, with just 3% expecting a fall.
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