Construction buyers report first growth for nine months

Grant Prior 3 years ago
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Construction buyers reported a return to industry growth in February for the first time in nine months.

The bellwether IHS Markit/CIPS UK Construction Total Activity Index hit 52.6 in February from 48.4 in January.

It was above the 50 no-change value for the first time since April 2019 while the overall rate of construction output growth was the fastest for 14 months.

The latest survey also pointed to the sharpest rise in new orders since December 2015.

Resdiential and commercial work led the improvement counterbalancing a marginal drop in civil engineering.

Tim Moore, Economics Director at IHS Markit, which compiles the survey said: “February’s survey data adds to signs that the UK construction sector has started to rebound after a downturn through the second half of last year.

“Growth of business activity was stronger than at any time since the end of 2018, supported by the fastest rise in new orders for just over four years.

“Some construction firms suggested that the recovery in output would have been even stronger had there not been disruptions on site from severe weather conditions in February.

“There were widespread reports that pent-up demand released since the general election had helped to boost workloads, especially in relation to house building and commercial construction projects.

“While construction order books have begun to recover in the opening part of 2020, the fly in the ointment is the uncertain impact of the coronavirus outbreak on UK economic growth prospects.

“A renewed slowdown could see domestic investment spending put back on hold and dampen the outlook for the UK construction sector.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply said: “After a sustained period of contraction in construction last year, the resurgence in levels of new work at the fastest rate since December 2015 was a surprising but much-needed development for a sector that was on its knees.

“As the blocks of December’s election and Brexit uncertainty were largely removed, it was the residential sector that was the main winner with the fastest escalation in housebuilding since July 2018.

“Purchasing levels rose at their fastest rate for over a year across the construction sector meaning unprepared suppliers bore the brunt of the upsurge.

“Their performance deteriorated again this month as delivery times and stocks of raw materials came under pressure.”

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