Details of the May 2015 UK Markit CIPS construction PMI data report 2 June 2015
- Prior 54.2
- Housing 59.4 vs 57.2 prior
The jump is being explained as a confidence boost following the election. That sort of talk always seems wishy washy for me but new orders can rise in the first 2 quarters of the year so some delay due to the election is possible
Chris Williamson at market notes that firms are now training in house, rather than sub contracting;
"The brakes are now off for the construction sector as it makes up some of the losses over the last few
months with a steady and comfortable improvement. Though nothing like the highs of 2014, the quietly
confident approach after the restraint displayed before the General Election, shows business
confidence at its highest since February 2006."Suppliers continue to experience pressure on their
stocks, but extra capacity has come back on line and it seems like the worst phase of raw material shortages has passed. Construction companies also reported wages were also on the rise, but from a low base after the pummelling the sector took during the recession. Input prices showed uplift after the lows of oil and raw materials costs that had been benefitting the
sector for some time. Firms favoured in-house training of staff instead of sub-contractors who were in shorter supply and demanding higher wages, demonstrating business confidence in the future of the sector and the ability to meet future demand. "
That's a good sign fro three reasons. Firstly it means that wage growth will pick up with the increase in staff (while costs are lowered from not paying high subbie fees), and two, these staff members are likely to be on more permanent contracts than subbies. Thirdly, it shows that companies are confident that business will pick up as training staff is an investment in the future
It's a potentially good sign for the labour market and the economy
UK construction PMI
