UK construction sector expansion cools

Paul Snell is managing editor at Supply Management
2 December 2014

Activity in the UK construction sector was at its lowest level for more than a year in November but continued to expand.

The latest Markit/CIPS UK Construction Purchasing Managers’ Index for the industry, where a figure above 50 indicates growth, recorded 59.4 last month compared with 61.4 seen in October. This was the lowest figure for 13 months, but still demonstrated strong expansion.

“The construction sector remains a strong growth engine within the UK economy, but momentum has undoubtedly cooled since the summer,” said Tim Moore, senior economist at Markit and author of the PMI.

A slowdown in civil engineering activity was blamed for the drop, with the sub-sector's weakest performance since July 2013. Both residential and commercial construction activity also expanded at a slower pace.

Unlike the manufacturing sector, construction buyers experienced sharp price inflation for materials, due to higher demand and capacity pressures on suppliers.

But despite the overall slowdown in activity buyers remained optimistic about future prospects, citing improving underlying demand and strong pipelines of residential building projects.

David Noble, group CEO, CIPS, said: “As the UK government announces more detail around road expansion plans, this may add to the pressure on suppliers and their ability to meet the needs of the sector.

“Though delivery times from suppliers have lengthened, procurement and supply chain managers paint a picture of general optimism among the economic doomsayers as the index remains well above the no change mark.”

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