Building firms rebound in a Brexit boom
THE UK construction industry gave Britain a Brexit boost after the sector bounced back last month to record an unexpected upturn in activity, a closely watched survey showed yesterday.
After Chancellor Philip Hammond’s Budget revealed Britain’s public finances in a better-than-expected shape, the Markit/CIPS UK Construction purchasing managers’ index further defied gloomy predictions.
With readings above 50 pointing to growth, the index showed a reading of 53.2, up from 52.1 in September.
The consensus among economists had been that it would fall to 52.
The fastest growth was seen in civil engineering, where activity rose more quickly than since July 2017. The other two categories monitored, housebuilding and commercial construction also grew, but more slowly.
Firms also continued to hire more employees – which Trevor Balchin, economics director of IHS Markit, said suggested they did not expect an imminent reduction in demand.
However, the survey also showed Brexit uncertainty weighing on the industry in the run-up to next March, amid the continuing search for a deal with Brussels.
Firms said they were less optimistic about growth prospects than for nearly six years.
Mr Balchin said: “Although total UK construction activity rose at a stronger pace in October, the underlying survey data paint a less rosy picture for the sector towards the end of the year.
“New contracts increased at only a modest pace, and firms were the least optimistic regarding the 12-month outlook for nearly six years.
“Construction companies again linked uncertainty to Brexit negotiations, which influenced delays to final decisions at clients.”
Ireland’s deputy prime minister said yesterday that Britain and the European Union could reach a deal by the end of this month.
Simon Coveney’s optimism was echoed by UK ministers.
How to keep trade free-flowing between Ireland and Northern Ireland after Brexit has become a sticking point. Mr Coveney said after talks in Dublin with UK ministers that a deal could be done by December.
Talks teams had made “a lot of progress” in recent weeks, with EU chief negotiator Michel Barnier showing “flexibility and imagination – but we are not quite there yet,” he said.
“There is some movement needed on the UK side to find a legal wording that can allow this process to agree to a draft withdrawal treaty.”