The construction sector rallied in June, with the HIS Markit/CIPS PMI moving from recent record lows, including a reading of 28.9 in May, to 55.3.
This is far above the market consensus of 47.0 and is the sharpest increase in output since July 2018.
Residential work increased the most in five years and purchasing activity grew at its fastest rate since December 2015.
Employed continued to fall, however, and new business volumes only increased “marginally” among subdued business confidence.
Naismiths director Gareth Belsham comments: “This is far from a return to normality, but the industry is bouncing back. Output has roared back into expansion territory, and levels of new orders have stabilised.
“Few sectors are more battle-hardened when it comes to enduring boom and bust than construction. And builders’ pragmatic resilience is once again on display in their confidence levels; nearly half of the construction firms surveyed by PMI researchers predict a further rise in business activity.
“Yet no-one should be complacent, and it’s still too early to talk of green shoots. Job losses are still picking up, and many construction firms are juggling the awkward question of whether the current relief rally is enough to justify taking back furloughed workers, let alone hire new ones.
“The prime minister’s ‘build build build’ slogan so far means little on the ground, where construction firms are busy battling the pandemic’s fallout.
“Shortages of materials are forcing up input costs and social distancing rules are squeezing productivity levels.
“Pushing the restart button on a halted project is never easy, but the wave of confidence at least gives the sense that the industry has begun its painful transition to the post-Covid world.”
