Election has had a positive impact on the construction industry, PMI finds

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4th June 2015 17:06 - Construction

The latest Market/CIPS construction purchasing managers’ index (PMI) has found that in May, confidence within the construction industry Election has had a positive impact on the construction industry, PMI finds increased to the highest rate it’d been in nearly 10 years. The findings were attributed to the Conservative party’s majority win in May’s general election.

The increase was led by house building as businesses, which had previously postponed projects in the lead up to the election, started to spend money again.

The industry also experienced an increase in optimism, with the sentiment surrounding the sector hitting the highest level it’d been since February 2006.

In May, the construction purchasing managers’ index stood at 55.9, which rose from 54.2 in April. The scores were much higher than the 50 that indicates growth.

The survey also highlighted a return to growth in civil engineering work. However, commercial building grew at the lowest rate in nearly two years.

One of the economists at Markit, Tim Moore, said of the findings:

“May’s survey provides the first sign of a post-election bounce in the UK construction sector.

“Construction firms experienced an upturn in new business growth from April’s near two-year low and job creation was the fastest recorded so far in 2015.

Despite a client spending rebound in May, all three key areas of construction activity have lost considerable momentum over the past 12 months. The scale of the construction slowdown since 2014 is such that it will not be fully reversed through the release of pent up demand after the election alone."

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