With the Purchase Mangers Index (PMI) surging to 64.6 it suggest that construction is booming. The PMI reports activity at levels not witnessed since 2009 and new work flows at a speed last recorded in August 2007.
Rob Wood at the German bank Berenberg is positive about the prospects for the UK. He said: “Looking across the range of UK indicators, the bottom line is that monetary stimulus is working, the recovery is under way and there are no signs of a slowdown.”
He pointed out that all parts of construction were expanding rapidly, with commercial building and civil engineering growing at their fastest rates since 2007 and housing at its fastest pace in more than 10 years.
But a glance at Building magazine, which tracks the Experian survey of construction industry firms, reveals a different picture. The figures for December, show a continued slide in growth across the industry after a slump in September. According to Experian, a summer of bumper activity gave way to a fall across the board, reaching its lowest level for a year.
The non-residential sector saw growth evaporate altogether. According to the Experian index, where 50 is the dividing point between expansion and contraction, non-residential work dipped to 49, the lowest value for nine months.
The regional outlook was also much less rosy. In the north east there is a boom and the turbo-charged car industry is driving growth in the West Midlands. But everywhere else most building firms are struggling.
Which index presents a truer picture in seems it very much depends on what aspect of the market is being considered and in what location. Therefore, it is important that potential developments are assessed accurately and do not rely overtly on market reports which could be misleading in those circumstances.
If your considering a development at present and need high levels of cost certainty please contact us for an initial discussion on 020 7060 6142