Mid Group founder Sahel Majali discusses new figures which indicate that the UK construction industry ended 2015 on a high, indicating that the sector could thrive in 2016.
Financial information company Markit and industry body the Chartered Institute of Procurement and Supply (CIPS) release a monthly UK Construction Purchasing Managers Index (PMI). The November index suggested that UK construction activity fell to a seven month-low of 55.3 points.
Any reading above 50 points indicates growth, so the UK’s construction sector continued to expand in November, but at a slower pace than the previous month. Online construction publication Building recently reported that Markit and CIPS have released their latest survey. The Index rose to 57.8 points in December 2015, indicating that UK construction activity picked up towards the end of the year.
This growth was largely influenced by the country’s commercial building sector. Commercial construction was the Index’s best performing sub-category in December 2015, as it was the month before. Markit and CIPS noted that improved UK economic conditions continued to increase demand for commercial projects towards the end of the year.
The UK’s housebuilding industry also contributed towards the increase in construction industry activity in December 2015. The Markit/CIPS Construction PMI indicated that housing activity rose at a robust rate within the same period, recovering from the nine-month low it hit in November 2015.
Engine of growth
Commenting on the release of the survey, Markit senior economist Tim Moore, who also served as the author of the Markit/CIPS Construction PMI said: “UK construction companies finished 2015 in a positive fashion, as overall output growth recovered from November’s seven-month low.
“Commercial building was the main engine of growth, with this area of activity expanding at the strongest pace since autumn 2014. Across the UK construction sector as a whole, the latest survey indicated a strong degree of optimism about the outlook for 2016, with firms mainly citing a strong pipeline of commercial development projects and new housing starts.”
Mid Contracting UK Construction
UK construction activity could rise to new heights in 2016. Global real estate adviser CBRE expects UK commercial property returns to stay strong this year, and remain positive through to 2020. Meanwhile Halifax Bank recently revealed that average UK house prices increased by 9.5% in 2015, the fastest annual rise in nine years. Therefore, the UK’s booming commercial and residential property sectors look set to provide developers with more opportunities to initiate lucrative projects in 2016.
Mid Contracting UK has extensive experience across the nation’s construction sector. We have the skilled professionals, market expertise and industry connections developers require to capitalise on the UK’s commercial and residential property markets.