Buyers see housing-led rebound in construction

Aaron Morby 11 months ago
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Construction buyers reported a modest rebound in construction activity in November driven by new housing growth.

Buyers survey suggest confidence is returning about future activity

Latest returns for the Markit/CIPS UK Construction Purchasing Managers’ Index survey also showed sustained reductions in commercial building and civil engineering, with the latter now experiencing its longest period of decline since early 2013.

In a mixed picture for the industry new orders and employment numbers also increased to the greatest extent in five months.

Business optimism about prospects for 2018 improved  from last month’s five-year low as sales enquiries lifted and confidence grew that clients would be less risk averse going forward.

The bellwether Index picked up from 50.8 in October to 53.1 in November, to remain above the 50 no-change value for the second month running.

Tim Moore, Associate Director at IHS Markit said: “UK construction companies experienced a solid yet uneven improvement in business conditions during November.

“Once again, resilient house building growth helped to offset lower volumes of commercial work and civil engineering activity.

“The latest drop in civil engineering was linked to a recent lack of tender opportunities for infrastructure-related projects.

Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement & Supply, said: “It appears that policy support and a small recovery in the UK economy has boosted sentiment and encouraged clients to come out of their shells and start building again.

“The housing sector was the primary driver of growth increasing at the fastest rate for almost half a year. “However it is private sector companies that need to commit to big ticket spending, with commercial development still underperforming as persistent Brexit uncertainty continues to bite.

“Overall, the sector showed an incremental improvement, but business optimism was on the rise and up from last month’s five-year low.

“Perhaps the darkest days are behind the sector with fresh impetus on the horizon for the New Year.”

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