Recovery falters as buyers report August orders wobble

Aaron Morby 3 years ago
Share

Confidence among construction buyers became more subdued in August after high hopes for recovery in July.

Recovery hits bump in the road as August orders fall
Recovery hits bump in the road as August orders fall

The sector reported a wobble in order levels blaming economic uncertainty and a wait-and-see approach among clients.

The bellwether IHS Markit/CIPS UK Construction Total Activity Index registered 54.6 in August, down from 58.1 in July.

Tim Moore, Economics Director at IHS Markit, which compiles the survey said: “The latest PMI data signalled a setback for the UK construction sector as the speed of recovery lost momentum for the first time since the reopening phase began in May.”

House building remained the best-performing area of construction activity, with strong growth helping to offset some of the weakness seen in commercial work and civil engineering activity.

The main reason for the slowdown in total construction output growth was a reduced degree of catch-up on delayed projects and subsequent shortages of new work to replace completed contracts in August.

Moore said: “Another month of widespread job shedding highlighted the ongoing difficulties faced by UK construction companies, with order books often depleted due to a slump in demand from sectors of the economy that have experienced the greatest impact from the pandemic.

“More positively for the employment outlook, business expectations climbed to a six-month high in August as construction firms turned their hopes towards a boost from major infrastructure work and reorienting their sales focus on new areas of growth in the coming 12 months.”

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “The momentum in the sector’s recovery hit a bump in the road in August with a sudden slowdown in output growth and tender opportunities, while employment trends remained the most fragile in a decade.

“This stalled progress was not a surprise given the warning signs last month that any hard-won progress could start to fizzle out.

“As new order gains slowed across all sectors, continuing COVID-19 anxiety amongst clients meant many projects still remained on ice.

“Though residential building remained the strongest, it too was showing signs of strain.

“In addition, there were ongoing difficulties in supply chains which hampered the sourcing of raw materials.

“Delivery times lengthened in August as a result of stock shortages at suppliers and cost increases were the highest since April 2019.

“Even with all these obstacles, builders were at their most optimistic since the beginning of the year. This glass half full attitude will have to carry companies into the autumn as the UK economy remains delicate and susceptible to more turbulence.”

Latest news

Bouygues/Murphy JV confirmed for £2.3bn Thames tunnel job

BMJV clinches 4.2km Lower Thames Crossing road tunnel job
1 day ago

Berkeley keeping close eye on subbies as market softens

Supply chain insolvency now bigger threat than build cost rises
14 hours ago

Roofing firm fined £881,000 after double fall

Court hears of two falls on sites involving same contractor
1 day ago

Plans in for £450m Coventry city centre regeneration

Work is expected to start next summer on City Centre South scheme
14 hours ago

Galliford Try to upgrade Red Arrows base

Contractor seals quartet of RAF base upgrades
14 hours ago

Strabag tunnel drive in Yorkshire sets new world record

Woodsmith potash mine tunnelling project to be included in Guinness World Records
1 day ago

McLaren and Arlington to develop York Central site

Developer deal signed for one of the UK’s largest city centre regeneration schemes
2 days ago

Watkin Jones plans 36-storey Glasgow tower

The Ard student rooms scheme will be Glasgow's second tallest building
2 days ago

Balfour Beatty on track for solid set of results

Country's largest contractor on course to meet financial targets
2 days ago

Brymor Group Southern heads for CVA

Hampshire builder applies for Company Voluntary Arrangement with its creditors.
2 days ago

Former Costain transport chief joins Aecom

Sue Kershaw takes up US-based vice president job with consultant
2 days ago

Industry’s best construction managers revealed

More than 80 now in the running for delayed awards: Full list
2 days ago

Materials prices plummet as housing demand slumps

Buyers report biggest fall in purchasing costs for 14 years
2 days ago

Welsh contractor Andrew Scott targets £90m turnover

Profit and revenue up at Port Talbot-based civils and building firm
3 days ago

M-AR buyer starts round of redundancies

30 jobs at risk after modular firm bought out of administration
3 days ago

First HS2 viaduct completes deck beam installation

EKFB completes beams for first of project's 50 major viaducts
3 days ago

Fatal accident at Laing O’Rourke Oxford site

Work suspended on site after tragedy
3 days ago

Homes lead the way as Bancon Group boosts turnover

Homes and contracting group looking to further growth in 2024
3 days ago

L&G Modular Homes scheme replaced by traditional build

Wolverhampton council chooses new partner and build method for £150m project
3 days ago

£33m Plymouth city centre homes scheme approved

Spring start for Bath Street scheme in Millbay regeneration area
3 days ago

Balfour renews £330m Lincolnshire highways deal

Firm will use its new operational control hub to promptly address network issues
4 days ago

Three Caledonian Modular-built schools to be demolished

DfE confirms Essex, Somerset and Northampton schools will be bulldozed and rebuilt
4 days ago

Gilbert-Ash takes £30m Tate Liverpool revamp

Work to start in the New Year on remodelling of iconic 1846 warehouse
4 days ago

HS2 Solihull mass transit enabling works out to bid

Bidding for £60m main works to start early next year
4 days ago

Modular health specialist Vanguard rescues M-AR

Deal with administrators sees Vanguard add production capacity with 100,00 sq ft offsite factory
4 days ago

Torsion forms JV to build £90m Leeds resi tower

Construction to start in January on one of Leeds' tallest towers
4 days ago

Approved change to concrete ‘recipe’ to slash carbon emissions

New approved concrete mixes will be able to blend finely ground limestone and fly ash
5 days ago

Network Rail unveils Cardiff South Central masterplan

Plans being drawn up for major housing-led mixed-use scheme
4 days ago

McLaren Living to revamp Watford police station site

Developer to submit plans for a major mixed-use development
4 days ago

National Grid £12.8bn HV civils framework hits market

Firms needed for major power line links and high voltage direct current converter stations
5 days ago

Contractor services