Commenting on the latest Markit UK Construction PMI data, Chris Temple, PwC’s UK engineering and construction leader, said:
“The UK construction industry enjoyed a relatively strong period of growth from early 2013 through to mid-2015, helped partly by a bounce back in UK-wide housing construction, commercial developments in London and government-led infrastructure programmes. However, we’re now seeing increased volatility across some sub-sectors, in particular residential housebuilding, mainly as a result of greater levels of market uncertainty, stalled client spending and delays in project development.”
“As well as commodity and currency volatility, the forthcoming EU referendum is weighing on the minds of business leaders. And as we’ve seen in the past, any short term political uncertainty has the potential to impact investment and development pipelines. However, any longer-term outcomes as a result of Brexit – and any resultant uncertainty – would entirely depend on what is negotiated in the event of a decision to leave. In just 12 weeks, we’ll know more about the lie of the land.”
“Nevertheless, the fact that PMI has remained flat against these geopolitical headwinds, does demonstrate a strong resilient streak within the UK construction industry and a strong foundation from which to keep building.”
“The domestic market will also have received a confidence boost the recent UK Budget with major infrastructure investment funding announced to enable further analysis of the Trans-Pennine tunnel, HS3 and Crossrail 2. While it will take some time for these projects to get from planning to production, it does provide the industry with a burgeoning market that can be tapped on their doorstep.”