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UK construction rebuilding its fortunes?

Friday, September 02, 2016 - 01:55

Britain's construction industry appears to be in recovery mode after a Brexit bruising. But, as Hayley Platt reports, the outlook for the UK's traditionally red hot property market is still far from certain.

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Rebuilding the losses following the Brexit vote. The latest construction PMI largely recovered in August. Just narrowly missing the all important 50 mark which denotes growth. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "People may have got too pessimistic in advance of the Brexit vote and certainly the fact that the world didn't end on June 25th probably sent a message to lots of businesses they could carry on." Welcome news then for the property sector too - one of the hardest hit immediately following the referendum. But a slowing global economy, geopolitical tensions and a migrant crisis in Europe - all good reasons why the residential housing market is still vulnerable. An ING survey showing expectations for UK house price rises changed after the Brexit vote. (SOUNDBITE) (English) ING BANK, SENIOR ECONOMIST AND AUTHOR OF THE INTERNATIONAL SURVEY, IAN BRIGHT, SAYING: "We re-ran the survey for the UK only - nothing changed except for 1 question, was expectations for house prices in the next 12 months. The percentage said that they expected house prices to increase in the next 12 months fell from 57 percent to 46 percent." Recent data shows mortgage approvals at their lowest since January 2015. And an Ipsos Mori survey for August showed housing anxiety at its highest in more than 4 decades. But the closely-watched Nationwide's House Price Index defied the post-Brexit Blues - rising 0.6 percent last month. SOUNDBITE (English) IG SENIOR ANALYST, CHRIS BEAUCHAMP, SAYING: "I think we've seen improvement in activity, we've seen steady demand from the housing sector and even construction in the city continues to hop along reasonably nicely." So - no hard landing as many predicted after the Brexit referendum - at least for now. Though news from McCarthy & Sons - Britain's biggest builder of retirement homes - of a slump in demand - means that worrying telltales are still there.