UK construction PMI unexpectedly jumps to 55.8 in July

The construction sector activity in the UK economy accelerated at the fastest pace since May 2017 in the month of July, a fresh report from Markit Economics showed on Thursday.

The final Purchasing Managers' Index (PMI) came in at 55.8 in July, up from 53.1 seen in June and surprised markets to the upside (52.8 expected).

Key Points:

Robust and accelerated rise in construction activity during July.  

House building expands at sharpest pace since December 2015.

Rates of new order growth and job creation gain momentum.

Tim Moore, Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI®, noted:

“July data reveal an impressive turnaround in the performance of the UK construction sector, with output growth the strongest for just over one year. While the recent rebound in construction work has been flattered by its recovery from a low base earlier in 2018, there are also signs that underlying demand conditions have picked up this summer. New business volumes expanded at the strongest rate since May 2017, while workforce numbers increased to the greatest extent for just over two and-a-half years.”

“House building was the bright spot for construction growth in July, alongside a stronger upturn in commercial development projects. Residential activity and commercial work both increased at the sharpest pace since December 2015, which contrasted with another subdued month for civil engineering.”