Growth slows but construction recovery continues

Grant Prior 2 years ago
Share

Construction buyers reported a continuing recovery in output last month but the growth rate was the slowest for five months.

The latest bellwether IHS Markit/CIPS UK Construction Total Activity Index fell to 53.1 in October from 56.8 in September.

The index has registered above the 50 no-change mark in each month since June.

House building was the star performer while commercial also grew but civil engineering activity dropped for the third month running.

October data also showed a robust increase in new work received by construction companies.

The latest improvement in new order books was the strongest since December 2015 with higher levels of new business thanks to the start of projects that had been delayed earlier in the pandemic.

The rebound in construction activity after the shutdowns continued to put pressure on supply chain capacity in October.

This was signalled by another sharp lengthening of delivery times for construction products and materials as the rate of input price inflation accelerated to its fastest since April 2019.

Looking ahead, construction companies reported optimism towards their prospects for the next 12 months, despite concerns about the wider economic outlook.

Around 45% of the survey panel anticipate a rise in output during the year ahead, while only 14% forecast a reduction.

Tim Moore, Economics Director at IHS Markit, said :”The construction sector was a bright spot in an otherwise gloomy month for the UK economy during October.

“Another sharp rise in house building helped to keep the construction recovery on track, albeit at a slower speed than in the third quarter of 2020.

“Commercial work also contributed to growth in the construction sector, while civil engineering remained the main area of concern as activity in this category dropped for the third month running.

“Supply chain difficulties persisted in October, as signalled by a sharp lengthening of delivery times for construction products and materials.

“Purchasing prices increased as a result of demand outstripping supply for construction inputs, with the rate of cost inflation hitting an 18-month high in October.

“New orders improved at the sharpest rate for nearly five years in October, suggesting a positive near-term outlook for construction activity.

“However, survey respondents commented on renewed economic uncertainty and concerns about the sustainability of the recovery as pent up demand begins to wane.”

Latest news

Graham hospital site hut complex destroyed by blaze

Site offices ravaged by fire which took eight hours to get under control
5 hours ago

Mace wins £150m over-station job at Liverpool Street

Latest win from Aviva Investors and Allianz Real Estate following earlier Moorgate contract
6 hours ago

Buyers see brighter days ahead despite resi slump

"Construction can see a path through for better outcomes in 2023"
9 hours ago

Australian firm to buy £300m gigaplant backer Britishvolt

New owner vows to complete giant factory in Northumberland
12 hours ago

Project delays curb Ardmore growth ambitions

Refurb and housing specialist sees profit fall after challenging year of delays and supply chain failures
12 hours ago

Scaffolders and sparks strike at antibiotic plant

Engineering construction workers down tools in bonus pay row
11 hours ago

McAlpine bags £1bn Sellafield concrete structures deal

Contractor signs 17-year concrete structures and groundworks framework
21 hours ago

Moving in to new markets paying off for McLaren

Contractor carving out new niche as leading player in heavy refurbs
3 days ago

Heavy materials sales fall amid slowdown in starts

Light side product sales grow helped by pace of activity for refurbs and energy-efficient retrofits
11 hours ago

Plan to add retentions record to payment reporting law

Government consults on tougher reporting to include disputed invoices and retention policies
3 days ago

Morgan Sindall wins £88m Beckton DLR depot upgrade

Delayed work to start on Docklands Light Railway train maintenance depot in East London
3 days ago

Hare and Severfield win £250m Sellafield deal

Country's two biggest steelwork contractors secure 17-year framework
4 days ago

Max Steward returns to head up ISG’s Agility fit-out arm

Former ISG project director returns after three years to take up MD role
4 days ago

McLaren wins massive Portland House refurb

Construction to start this year on £380m revamp of 28-storey building in central London
4 days ago

Green light for £275m HS2 Midlands nerve centre

Trio of contractors battling it out to win huge new depot near Birmingham
4 days ago

Winners named for Government £10bn offsite framework

29 firms secure places on mega framework for schools, healthcare, defence and justice jobs
5 days ago

ISG, Amey and Costain now industry’s quickest payers – list

Average payment times from main contractors slip by a day
5 days ago

Staff at Outco Surfacing start looking for new jobs

Administration notice filed two years after acquisition of NMC Group
5 days ago

£4.75m building work provision tips Higgins into the red

Partnerships business counts cost of changes to building safety rules
4 days ago

John F Hunt snaps up London temporary works design firm

Demolition contractor buys geotechnical and structural engineering design specialist RKD Consultant
5 days ago

Vital Energi lands £13m package at Plumstead regen site

Specialist will start on site this summer helping to transform the former home of Arsenal FC
4 days ago

Galliford Try to start £14m Scunthorpe Market scheme

Firm will build NHS staff accommodation and offices in two phases
5 days ago

Vast £500m British Library expansion go-ahead

London Mayor still needs to give final nod to 800,000 sq ft extension at St Pancras site in London
6 days ago

Wates names new chief executive

Cork-born Eoghan O’Lionaird to join later this month
6 days ago

Keltbray director joins Barhale as North East chief

Mark Wood heads operations in Yorkshire and North East England
5 days ago

Major London City building green deep retrofit approved

St Bride’s Tavern near Fleet Street will be demolished for the building expansion
6 days ago

Gilbert Ash lands starring role in £38m Welsh theatre revamp

Contractor to start work this year on Theatr Clwyd upgrade
5 days ago

Property clients to ramp up spending on decarbonising

Survey reveals nearly half of property chiefs plan to speed up spending on net-zero programmes over next twelve months
5 days ago

Average self employed labour rates top £1,000 a week

Average weekly earnings reach high for skilled trades
7 days ago

BAM wins £49m Harrogate Convention Centre revamp

Local council hopes to sanction work start this autumn
6 days ago

Contractor services