The IHS Markit/CIPS UK Construction Total Activity Index
recorded a score of 28.9 during the month – an improvement on the record slump
in April when it fell to 8.2 – but still a decline in activity (a score of 50.0
represents no change).
The softer pace of decline was attributed to a gradual
reopening of construction sites as lockdown measures in England eased but it
was still the second-lowest level of activity since February 2009.
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Around 64% of the survey panel reported a drop in
construction activity during May, while only 21% signalled an expansion.
Construction companies recording a drop in activity during
May often cited furloughed staff across the supply chain, as well as prolonged
business closures in other parts of the economy and disruptions from social
distancing measures on existing projects.
Residential work proved the most resilient category in May
(index at 30.9), followed by civil engineering (28.6). Commercial building also
fell at a slower pace during the latest survey period, but was the worst
performing broad area of construction (26.2).
There was also a “rapid” drop in new orders received by UK
construction companies, almost exclusively attributed to the coronavirus pandemic,
according to the survey.
A number of firms commented that a lack of capacity for
deliveries and ongoing business closures had resulted in the need to source
alternative suppliers, which had also pushed up costs.
Looking ahead, construction companies remain downbeat about
their prospects for the next 12 months, with sentiment holding close to April's
low.
Tim Moore, economics director at IHS Markit, which compiles
the survey, said: “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.
"It seems likely that construction activity will
rebound in the near-term, as adaptations to social distancing measures become
more widespread and the staggered return to work takes effect. However, latest
PMI data pointed to another steep reduction in new orders received by UK
construction companies, with the pace of decline exceeding the equivalent
measures seen in the manufacturing and service sectors.
"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."
