Barbour ABI response to the Markit/CIPS UK Construction PMI announcement for May 2014

Michael Dall, lead economist at construction intelligence experts Barbour ABI,commented:

“With economic output only 0.6 per cent below its pre-crisis peak in Q1 2008, there is no question that the economy is experiencing a growth phase. However, this latest Markit/CIPS UK Construction PMI announcement indicates that the rate of growth may be slowing.

“While private housing continues to drive resurgence in the construction industry, boosted by government initiatives such as Help to Buy, a fall in mortgage approvals announced yesterday also suggest that the housing market may be cooling. This is slightly concerning as so much of the recent growth in construction activity is concentrated within the housing sector. An upturn in other key sectors – particularly private commercial and infrastructure – is vital for a stronger and more durable recovery.

“In addition, there have been reports recently of skills shortages affecting the construction industry. Addressing these supply-side constraints is crucial to ensure the long-term health of the industry going forward.”