UK construction output continues to grow

Gurjit Degun
3 June 2014

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3 June 2014 | Gurjit Degun

The UK construction industry saw another increase in output in May, although the sector's momentum continued to ease.

The Markit/CIPS UK Construction Purchasing Managers’ Index fell to 60 in May, compared with 60.8 in April. The reading was above the 50 baseline, indicating growth, for the 13th successive month, but showed the slowest pace of expansion since October last year.

The slower overall construction output growth reflected a moderation in commercial building activity, which saw its weakest expansion for seven months. House building remained the strongest performing area of activity, despite the pace of growth easing slightly to a three-month low. Civil engineering output increased at a “robust rate” that was faster than in April.

Input buying increased at the fastest pace for three months. The survey found supplier lead times “lengthened markedly” after respondents pointed to a shortage of stock and supply-chain bottlenecks.

Sub-contractor availability fell at the sharpest pace since August 1997, despite construction firms reporting a moderate decrease in the proportion of work undertaken by sub-contractors in May.

Tim Moore, senior economist at Markit, said: “The construction sector is experiencing its longest period of job creation for six years. Strengthening demand for construction staff arrived amidst the fastest drop in sub-contractor availability since August 1997, which in turn contributed to a survey-record rise in sub-contractor charges in May.”

David Noble, group CEO, CIPS, added: “Strong expansion in new business and improving economic conditions reflected particularly well on business optimism and outlook for the year ahead.”

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