Construction sector 'flat as a pancake'

Will Green is news editor of Supply Management
2 March 2018

Growth in the UK construction sector edged upwards in February against a background of fragile confidence and strong input inflation.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index rose to 51.4 in February, up on 50.2 in January and against the neutral reading of 50.

New business volumes fell while firms reported higher raw material prices, fuel bills and staff wages.

Civil engineering was the worst performing category, with activity falling at the sharpest pace for five months, while housebuilding growth was soft. However, commercial construction expanded at the fastest rate since May 2017.

Duncan Brock, director of customer relationships at CIPS, said: “The sector was feeling as flat as a pancake in February with falls in new orders for the second month in a row and with just a marginal rise in overall activity, as ongoing political and economic uncertainty shouldered the blame.

“Cost pressures continued to creep up and bear down on purchasing activity as raw materials became even more expensive and in shorter supply, and vendor performance degraded again impacting on the completion of projects. A talent shortage also gave staff the power to demand higher wages, adding to the overall cost burdens for business.”

Tim Moore, associate director at IHS Markit, said: “Despite pockets of resilience in the UK construction sector, there was little sign of an imminent turnaround in overall growth momentum. Reflecting this, total volumes of new work dropped for the second month running in February and business optimism was among the weakest recorded by the survey since 2013.”

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