UK construction sector in ‘rude health’

Paul Snell is managing editor at Supply Management
3 November 2015

The UK construction sector experienced strong growth in October, although expansion was slightly slower than in the previous month.

New business increased at its fastest rate for 12 months, with new projects wins in both the private and public sectors. Employment in the sector also rose at its quickest in almost a year, taking on more staff to deal with new projects.

The Markit/CIPS UK Construction Purchasing Managers’ Index (PMI), where a figure above 50 indicates expansion, recorded 58.8 last month. This compares with the 59.9 seen in September. The industry saw expansion in all three sub-sectors – housing, commercial and civil engineering.

Input buying rose at the steepest rate for nine months, and greater capacity among suppliers helped ease pressure on lead times for raw materials.

Tim Moore, senior economist at Markit, said: “Another relatively buoyant construction PMI reading indicates that the sector remains in rude health. Rather than acting as a drag on the economy, as suggested by recent GDP estimates, the sector is continuing to act as an important driving force behind the ongoing UK economic upturn.”

David Noble, group CEO, CIPS: “Supplier performance deteriorated to the least marked extent for almost five years in October, as capacity was increased to meet an upsurge in purchasing activity – the strongest for nine months.

“With sustained growth now for two-and-a-half years, respondents also reported more confidence in the sector and from clients, and an expectation of an even stronger performance next year.”

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