UK PMI construction rose notably to 28.9 in May, up from 8.2, but missed expectation of 30.0. Still, it was the second lowest level since February 2009 and stayed well below 50 handle. Markit said that severe weakness persists during May, despite gradual reopening of construction sites. There were rapid falls in new orders amid projection cancellations. Supply chain disruptions also remained widespread.
Tim Moore, Economics Director at IHS Markit: “A gradual restart of work on site helped to alleviate the downturn in total UK construction output during May, but the latest survey highlighted that ongoing business closures and disruptions across the supply chain held back the extent of recovery.”Survey respondents often commented on the cancellation of new projects and cited concerns that clients would scale back spending through the second half of 2020, especially in areas most exposed to a prolonged economic downturn.
“With construction firms anticipating a reduced pipeline of work and fewer tender opportunities, business expectations for the next 12 months remained negative in May. Since the start of the lockdown period in March, business sentiment has remained more downbeat than at any time since October 2008.”
