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Upbeat UK Residential Construction Activity Continues





It’s been a positive year so far for the UK’s residential construction sector and June rounded off a pleasing first half for home building. Although there are concerns over the UK’s economic future, due to an unsettled political backdrop and the likely lengthy Brexit negotiations, confidence remains upbeat as activity and new orders grow.

“The monthly Construction Purchasing Manager’s Index from data specialists Markit, paints a healthy picture of the UK’s residential construction sector,” said Proskips. “It’s a closely followed and reliable indicator of activity, so confirmation that the first half of 2017 has been a good one for home-builders, is welcome news.”

Strong Residential Construction

The monthly construction PMI slipped to a balance of 54.8 in June, from May’s 56.0. While that shows the pace of growth in the construction sector was a little slower in June than in May, a figure above 50 represents sectoral expansion, which means things are still positive. The data also showed that new orders and activity for residential construction were both the second strongest since the record high in December 201.

The reason for the slowdown in the pace of growth in the sector wasn’t due to residential construction – it expanded for a 10th straight month. No, the reason for the slowdown was down to a lack of new orders in the commercial and civil engineering sectors.

Much more than the residential housing sector, the commercial and civil engineering fields were hit by election and Brexit-related nerves. This culminated in a number of projects nearing completion and fewer new jobs to fill the upcoming voids.

“With strong support from the Government, residential construction remains a driver of property construction activity in the UK and looks set to do so for some time to come,” said Denhan Guaranteed Rent. “The need for international investment for commercial and infrastructure projects – both in the construction sector and for the finished product – meanwhile, were likely behind the weaker level of confidence and investment there.”

Residential Planning Permission on the Up

Separate data from the Government shows there were 43,170 new homes built in the first quarter of 2017. That’s a 3% rise from the fourth quarter of 2016 and a 21% gain from a year earlier.

Upbeat UK Residential Construction Activity Continues

In addition, official Government figures showed many more areas of the UK experienced a rise in the number of housing starts than those experiencing a fall. There were significantly large rises in the number of new building starts in the first three months of 2017 in:

• Dartford.
• South Norfolk.
• Oxfordshire.
• Gloucestershire.

The picture among new build completions was also a positive one.

“Residential property construction is in a sweet spot right now and it seems set to stay that way for some time,” said Lawsons & Daughters. “However, it’s also important for the Government to work hard on ensuring the UK remains an attractive location for overseas investment in commercial and infrastructure projects in order to secure the future of a healthy economy.”