There was a lot made about the potential contraction of the Construction industry in recent months, with a number of surveys and statistics showing that the industry has been struggling somewhat in the wake of the EU referendum. However, in line with the latest Economic figures from the Government, a survey for the month of August appears to demonstrate that the industry is no longer contracting at the rate it was, which appears to be a sign of recovery for Construction.The Markit / CIPs purchasing managers’ index (PMI) for Construction rose to 49.2 during August, up from the figure of 45.9 that C-Link reported on last month. While it is important to remember that any figure below 50 is a sign of contraction, the fact that the number has increased so markedly is a positive sign that Construction’s rebound is in full effect.Tim Moore, who is the Senior Economist at the organisation, commented:“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.“However, the latest survey indicates only a partial move towards stabilisation, rather than a return to business as usual across the construction sector.“There were still widespread reports that Brexit uncertainty had dampened demand and slowed progress on planned developments, especially in relation to large projects.”
Others have pointed out that the decreased power of the pound has pushed up purchasing costs for goods and materials, which has also had a negative effect on some Construction Specialists. However, the main factor still appears to be Brexit, and the lack of confidence in the stability of the industry following Britain’s decision to leave the EU.
Samuel Tombs, who is the Chief UK Economist with Pantheon Macroeconomics, expanded on this thought, stating: “Construction will continue to struggle until business confidence improves.”
He points to protracted negotiation periods as the main reason for the industry, indicating that the recent contractions are less due to a lack of work or skills, and more to do with the instability of the market itself.
This last point is a positive one for everybody in Construction in that it is market forces that are outside of our control that have affected the industry, rather than issues within Construction itself.
With procurement becoming more of an issue post-Brexit, a platform that makes the process simpler and more efficient is needed. This is where C-Link comes in. C-Link connects Construction Professionals with Construction Specialists and streamlines the entire procurement process.
If you would like to find out more about our revolutionary platform, please visit www.c-link.com today.
C-Link – Construction sourcing made easy.
Paul was a Quantity Surveyor who gained 10 years experience of managing £200 million worth of flagship UK projects, including 20 Fenchurch Street and Battersea Power Station. In 2015, Paul founded C-Link with the intention of sharing his expertise of managing major projects with the SME market.
