Housing drives construction activity recovery in April

Aaron Morby 6 years ago
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Construction buyers saw a modest recovery in construction output following the weather-related disruptions seen during March.

Increase in new business was the first recorded by the survey so far this year
Increase in new business was the first recorded by the survey so far this year

House building experienced robust growth in April while underlying demand across the construction sector remained subdued, with total new work rising only marginally last month.

The increase in new business was the first recorded by the survey so far in 2018.

At 52.5 in April, the seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index® picked up sharply from the 20-month low seen in March (47.0).

Latest survey data indicated that construction firms are relatively upbeat about the 12-month business outlook, with the degree of confidence the strongest recorded since last May.

Tim Moore, author of the IHS Markit/CIPS index, said: “A rebound in construction activity was pretty well inevitable after snowfall resulted in severe disruptions on site during March.

“House building led the way, with growth in April among the strongest seen over the past two-and-a-half years.”

He added that the picture was less positive in other areas of construction, with commercial building and civil engineering work rising only marginally.

“Survey respondents noted that heightened economic uncertainty continued to hold back construction growth in April, with risk aversion among clients leading to delays with spending decisions on new projects.”

“A consistent theme so far this year has been fragile demand conditions and subdued volumes of incoming new work,” he added.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “April’s data provides some relief after last month’s weather disruption, especially for the housing sector after a lacklustre few months.

“However, economic uncertainty and Brexit-related indecision continue to lurk beneath the surface as obstacles to the construction sector’s stability.

“There were some positives reported by construction firms in April as optimism rose to its highest level since May 2017 and an increase in workforces was reported in anticipation of a better second quarter of the year.

“What the sector needs now is more widespread client confidence and big ticket projects to follow suit.”

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