Housing underpins construction 'rebound'

Will Green is news editor of Supply Management
4 December 2017

The housing sector has pushed growth in UK construction to a five-month high, according to the latest PMI.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index hit 53.1 in November, up on 50.8 in October and against the no-change reading of 50.

Firms reported resilient demand for house building projects, while commercial construction was the weakest performing area. This was linked to Brexit-related uncertainty and the subdued economic outlook.

Civil engineering activity fell for the third successive month, representing the longest phase of decline in more than four years. Some respondents mentioned hopes that forthcoming tender opportunities on infrastructure programmes would boost workloads.

Lead times for construction products and materials lengthened sharply, linked to pressure on supplier capacity, while cost inflation eased to its least marked for 14 months.

Duncan  Brock, director of customer relationships at CIPS, said: “Across construction supply chains delivery times have been under pressure, as materials were in higher demand while stocks remained in short supply. Lead times from vendors have now deteriorated in every month for over seven years.”

Tim Moore, associate director at IHS Markit, said: “Survey respondents noted that residential projects underpinned the rebound in total new order growth to its strongest since June, helped by strong demand fundamentals and a supportive policy backdrop.”

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