Construction sector continues to recover

Last month saw UK construction companies report a strong increase in output volumes with workloads being boosted by the fastest rise in overall new orders in seven years.

The IHS Markit/CIPS UK Construction PMI® revealed that the sector experienced the biggest job creation since December 2015 and companies remained ‘highly upbeat’ about their growth prospects.

Tim Moore, Economics Director at IHS Markit, commented, “The UK construction sector is experiencing its strongest growth phase for six-and-a-half years, with the recovery now evenly balanced across the house building, commercial and civil engineering categories.

“New orders surged higher in April as the end of lockdown spurred contract awards on previously delayed commercial development projects. This added to the spike in workloads from robust housing demand and the delivery of major infrastructure programmes such as HS2.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, added, “The overall growth rate of new business strengthened to the fastest since September 2014 as all three sectors improved and civil engineering the laggard of last year gained the most momentum.

“Issues around supply chain performance acted as a drag on capacity however as supply constraints on essential materials increased to one of the third highest levels since 1997 when the survey began. Brexit issues remained a factor affecting deliveries from the EU and suppliers generally were struggling to meet the sudden rush in demand leading to shortages of basic materials.

“This inevitably led to the sharpest rise in cost inflation in a generation as builders scrambled to catch up on projects but the biggest rise in job creation since December 2015 also followed, signalling sustainable growth in the sector this summer.”

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