By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East
There’s been a lot of talk about growth or lack of it, in the industry, but recent survey results show that we are growing, just not at the speed we might have hoped for. Survey results from Markit Economics and the Chartered Institute of Procurement & Supply (CIPS) survey shows that the industry is expanding at a steady pace.
Now, it might be growing at its slowest pace for more than two years but the industry is striving, and that’s all we can ask of it. Analysts did predict a slight decline for March, but the industry has proved them wrong and held steady.
If the industry keeps performing the way it is, we’re headed for three full years of growth, showing that we’ve gone from strength to strength each year since the recession.
The pace of expansion was slow throughout March, with less job creation and subcontractor usage dropping two months in a row, but the point is it is still expanding, and we must focus on that. The Markit/CIPS UK construction purchasing managers’ index (PMI) stood at 54.2 last month, which although it hasn’t changed since February, it is slightly better than what analysts expected and higher than the neutral 50.0 value, as it has been now for the 35th consecutive month.
Increases in commercial work and engineering activity were both counterbalanced by a slowdown in residential building, as the latest increase in housing activity was only marginal and the weakest recorded since January 2013. Although it is disappointing to see house building growth almost come to a halt given the government’s plans for new houses, it’s not all doom and gloom, a marginal increase is still an increase!
51per cent of survey respondents did expect a rise in business activity over the next 12 months,with only 11 per cent forecasting a reduction, showing that companies do remain optimistic about their potential growth.
The industry is going to go through slow growth periods, but optimism and confidence will see us through difficult times, what’s important is that we never lose faith or give up on companies and the industry as a whole, so it’s amazing to see that over half of survey respondents were optimistic about their future.
As well as general unpredictability, the forthcoming EU referendum is, as expected, weighing on the minds of business leaders. The uncertainty of Brexit provides us with potential short term and long term impacts, but until a decision and negotiations are made, we can’t prepare for such outcomes. Hopefully we’ll be in a better position in a few months’ time and can plan for the future with confidence.
One thing to take from the survey results is the fact that PMI has remained steady against all odds, demonstrating a strong resilience in the industry and a strong foundation from which to keep building, so let’s do just that!