With the UK construction sector seeing a downturn in recent months, umbrella company contractors will be pleased to learn that the industry is moving closer to stabilisation.
According to the latest Markit / CIPS UK Construction Purchasing Managers’ Index, UK construction companies indicated a sustained reduction in business activity during August, however, the pace of decline was only marginal and much softer than the seven-year record seen during July.
Findings reveal that new order volumes also moved closer to stabilisation, with the latest reduction the least marked since May – this contributed to a renewed rise in staffing levels across the construction sector.
Reports from survey respondents suggested that Brexit uncertainty continued to act as a brake on the construction sector during August, especially in terms of house building and commercial work. However, a number of firms noted that sales volumes had been more resilient than expected.
Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI®, commented, “The downturn in UK construction activity has eased considerably since July, primarily helped by a much slower decline in commercial building. Construction firms cited a nascent recovery in client confidence since the EU referendum result and a relatively steady flow of invitations to tender in August.
“Despite another month of reduced output, the latest figures can be viewed as welcome news overall after a challenging summer for the construction sector. The move towards stabilisation chimes with the more upbeat UK manufacturing PMI data for August, and provides hope that the near-term fallout from Brexit uncertainty will prove less severe than feared.”
David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, added, “Employment levels recovered to a modest degree, though at the second-slowest pace for three years. Some firms reported that they planned to increase staff numbers in hopeful anticipation of a surge in activity towards the end of the year. Business sentiment was moderately more positive than that seen in the immediate aftermath of the Brexit vote.”
Daniele Cantello is an Contract Manager for Contractor Umbrella Ltd, one of the UK’s Most Respected Umbrella Companies. Learn more about Daniele on Google.
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