Construction raw material delivery times lengthen to second-greatest extent in 17 years

Will Green is news editor of Supply Management
2 April 2014

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2 April 2014 | Will Green

Delivery times for raw materials in the UK construction sector lengthened in March by the second-greatest extent since 1997, according to a survey of buyers.

The Markit/CIPS Purchasing Managers’ Index hit 62.5 in March against a baseline of 50 that indicates no change, amid reports that pressures on supplier capacity were lengthening lead times. These were exceeded only by the increase experienced last November.

Tim Moore, senior economist at Markit, said: “The latest survey does little to dispel concerns that supplier capacity will become a fly in the ointment. Lead times for the delivery of construction materials lengthened in March by one of the greatest amounts since the survey began in April 1997, while sub-contractor availability fell at the fastest rate for thirteen-and-a-half years.”

The index was slightly down on February and down on January’s six-year high, but it has registered overall growth for 11 months in a row.

Confidence in the sector reached a seven-year high in March, with around 59 per cent of survey respondents positive about the year ahead, against reports of improving underlying demand and more favourable business conditions.

Housing was the best-performing category and while civil engineering output growth slowed markedly, following a flood relief-driven survey record high in February, commercial construction rose sharply.

Volumes of new work increased for the eleventh successive month, though the rate of new business growth slipped to a six-month low, and the rate of job creation was the second fastest since August 2007.

CIPS group CEO David Noble said: “Confidence in construction is soaring thanks to the budget boost and the dissipating impact of the floods, in a ringing endorsement the recovery will continue.”

But he added: “Supply constraints have now been around for a long time, and with rising cost inflation, are a growing concern that could hold the sector back.”



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