The construction PMI for the month of November was released yesterday for the UK that showed a strong outturn and topped consensus forecasts. The reading of 62.6 (October: 59.4) came in above forecasts that had called for a reading of 59 and marks the highest reading in over six years. The reading has been above 50 in every month since May of this year. <p>
Breaking down the PMI by component end market, there continues to be a strong increase in activity across residential construction (reading: 60) markets while there has also been a continuing improvement for non-residential construction (reading: 60). <p>
The PMI bodes well for Kingspan in particular as the increase in non-residential construction is likely to be felt sooner given that non-residential activity has a bias towards new build projects. For Grafton, the continuing increase in housing transactions will likely lead to increased demand for RMI projects with a lag of several months that is of greatest benefit to the group. <p>
By company, the UK marks an important end market for Kingspan and Grafton. In the case of Kingspan, the geography makes up 34% of total Group sales while for Grafton, the derives the vast majority of its sales (76%) from the UK.
Merrion Stockbrokers Limited (registration no. 307878)
is a limited liability company whose registered office is at
Block C, The Sweepstakes Centre, Ballsbridge, Dublin 4, Ireland.