Construction buyers report return to growth

Grant Prior 5 years ago
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Construction output rose for the first time since January last month according to the latest survey of industry buyers.

The IHS Markit/CIPS UK Construction Total Activity Index posted a figure of 50.5 in April compared to 47.7 in March.

Any number above 50 represents growth and April’s positive result followed two months of industry contraction.

The rise was driven by the fastest increase in house building so far in 2019 while commercial work and civil engineering activity continued to decline but at slower rates.

Tim Moore, Associate Director at IHS Markit, which compiles the survey said: “A return to growth would normally be considered a positive month for the UK construction sector, but the weakness outside of house building gives more than a little pause for thought.

“Commercial activity and civil engineering both remained on a downward path in April as political uncertainty led to delays with spending decisions.

“Residential work retained its position as the sole driver of growth across the three main segments of construction activity. Survey respondents once again noted that residential projects were buoyed by strong demand for new homes, low mortgages rates and first-time buyer incentives.

“On the supply side, subcontractor availability worsened and construction firms continued to report low stocks among suppliers in April.

“Latest data revealed the greatest lengthening of lead times for construction inputs since February 2015, reflecting ongoing capacity pressures across the supply chain.

“The forward-looking survey indicators remain subdued, with the UK construction sector recording a drop in business optimism during April and the largest fall in new work for over one year.

“A lack of new work has started to impact on staff recruitment, as signalled by a reduction in payroll numbers for the first time since July 2016.

“This provides another signal that construction firms are bracing for an extended period of soft demand ahead.”

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