Easing supplier delays offer 'glimmer of hope'

Will Green is news editor of Supply Management
6 December 2021

The number of construction firms reporting supplier delays eased in November, offering a “glimmer of hope” for supply chains, according to the latest PMI.

Under half (47%) of companies cited longer delivery times, compared with a peak of 77% in June, suggesting the worst phase of supplier delays may have passed.

Rapid input price inflation persisted, with haulage driver shortages adding to cost pressures, but the latest rise in operating expenses was the least marked for seven months.

Three quarters (72%) of survey respondents reported an increase in purchase prices, while 3% reported a decline.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index rose to 55.5 in November, up on 54.6 in October and against the 50 no-change reading.

Commercial construction was the best-performing area, with house building showing a slight decline and civil engineering the weakest.

Duncan Brock, group director at CIPS, said: “UK construction enjoyed a rebound in November with the fastest level of output growth for four months as supply chain managers increased their purchasing activity to meet a strong pipeline of new building projects

“Adding to this positivity was signs of recovery in supply chain performance with just 47% of construction firms reporting longer waiting times, which is the smallest number for eight months. Even with this glimmer of hope that the pressure on deliveries was easing, purchasing remained at higher level to counteract disruptions from ongoing driver shortages and port delays as supply chain managers bought more than their immediate need.”

Tim Moore, director at IHS Markit, said: “Input price inflation remains extremely strong by any measure, but it has started to trend downwards after hitting multi-decade peaks this summer.

“The latest rise in purchasing costs was the slowest since April, helped by a gradual turnaround in supply chain disruption and a slight slowdown in input buying. Port congestion and severe shortages of haulage capacity were again the most commonly cited reasons for longer lead times for construction products and materials.”

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