Construction roles up despite business activity growth easing

(3 minutes to read)

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Although UK construction firms indicated a disappointing end to 2018, a solid rise in job creation was recorded across the sector.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) found that business optimism towards the year picked up in December, with the degree of confidence the highest since last April and well above the near six-year low seen in October.

According to the report, it was suggested that subdued demand conditions were the main factor behind softer output growth in December. There were also some reports that unusually wet weather had acted as a brake on construction work.

A solid rise in employment numbers was recorded across the sector. However, the rate of job creation eased from November’s near three-year peak. Sub-contractor usage meanwhile picked up, with the rate of expansion the strongest since December 2015.

Tim Moore, Economics Associate Director at IHS Markit, which compiles the survey, commented, “UK construction firms signalled a slowdown in housing and commercial activity growth during December, which more than o set a strong performance for civil engineering at the end of 2018.

“Strong demand among first-time buyers meant that house building was the fastest growing category of construction output during 2018. However, construction companies indicated a renewed loss of momentum in December. Residential growth remains much so softer than the two-and-a-half year peak achieved last summer.

“Civil engineering was the stand-out area of construction growth in December, with activity rising at the fastest pace since May 2017. Survey respondents also noted that the strengthening infrastructure pipeline is set to become a key engine of growth in 2019, despite concerns about possible delays to the delivery of major projects.

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, added, “With a slight rise in new orders and a softening in overall activity growth, firms continued to be impacted by Brexit-related uncertainty and reluctance by clients to place orders especially for commercial projects.

“Through all this, construction firms remained resilient as optimism for the future rose to an eight-month high. This muted end to the year could not dampen hope completely as construction kept its head just above water waiting for political resolutions to the Brexit crisis and a clear path ahead.”

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