Commenting on the latest IHS/Markit Construction PMI survey released today which revealed that construction activity in May rose at its fastest pace since December 2015, Kelly Boorman, head of construction at RSM said:
‘We’ve already seen a strong growth in new housebuilding starts in the first quarter of this year and this latest construction PMI survey suggests that residential building is gaining further momentum. It’s likely that we’ll soon see housebuilding activity return to pre-financial crash levels. Clearly the large housebuilders are leading the charge, but the Government is also keen for more small and medium sized construction businesses to play their part.
‘This increase in housebuilding activity has also led to a rise in staff recruitment over the last month with the job creation rate accelerating to its highest level since January 2016. This is a sign of a buoyant market but life is already getting harder for construction businesses seeking the right talent. Looking longer term recruitment may get much more competitive, particularly when some of the large scale infrastructure projects start in earnest, and wage costs could rise as a result.
‘Respondents also reported a strong pipeline of new development projects and resilient underlying demand conditions so clearly there is a strong degree of optimism in the sector at the moment. The survey also revealed that the rate of inflation for imported construction materials appears to have peaked, although project managers will need to factor in the lengthening delivery times given the high current level of demand.’