Commercial jobs spur February new orders rebound

Grant Prior 1 month ago
Share

Construction buyers reported a return to growth in February led by a rise in commercial contracts.

The latest IHS Markit/CIPS UK Construction Total Activity Index posted 53.3 in February – up from 49.2 in January, where any reading above 50 represents growth.

Residential work remained the strongest area of growth in February although the speed of recovery eased slightly since January.

There were some reports citing temporary delays on site arising from adverse weather and supply chain issues -especially for timber.

But the slowdown in house building was more than offset by the sharpest rise in commercial work since last September in anticipation of improving UK economic conditions over the course of the year.

Optimism levels among buyers hit their highest levels for five years.

Tim Moore, Economics Director at IHS Markit, said: “Construction work regained its position as the fastest-growing major category of UK private sector output in February.

“The rebound was supported by the largest rise in commercial development activity since last September as the successful vaccine rollout spurred contract awards on projects that had been delayed at an earlier stage of the pandemic.

“Civil engineering activity has been somewhat subdued in recent months, but survey respondents continued to cite the positive outlook for infrastructure work on major transport projects as a factor helping to boost confidence in the construction sector.

“Stretched supply chains and sharply rising transport costs were the main areas of concern for construction companies in February.

“Reports of delivery delays remain more widespread than at any time in the 20 years prior to the pandemic, reflecting a mixture of strong global demand for raw materials and shortages of international shipping availability.

“Subsequently, an imbalance of demand and supply contributed to the fastest increase in purchasing costs across the construction sector since August 2008.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply said: “On the one hand, February saw a welcome rise in overall output in the construction sector as commercial projects in particular were woken from their slumber and purchasing levels rose across the board for the ninth month in a row.

“On the other hand, strong demand for products added pressure to already impaired supply chains as sellers battled with raw material shortages, and the costs of business rose at the fastest rate since August 2008.

“Though delivery times were still deteriorating as port disruptions made their mark, it was to a lesser degree compared to January suggesting the worst of the squeeze due to Brexit may have eased.

“Supply chain managers found themselves spinning a number of plates with creative ways to get stock including sourcing more local supply for some.

“These ongoing issues did nothing to dampen builder enthusiasm as optimism for the future rose to its highest since October 2015 and this return to confidence lead to job hiring at the fastest rate for almost two years.

“With part-time furlough options now in place, some constructors will be mixing and matching their approaches to meet the ebb and flow of projects and capacity in the coming months.”

Knowledge is power – get all the construction data you need

The Enquirer has introduced a new construction data page offering easy-to-access market intelligence to help you do better business.

Alongside contracts leagues and daily tender invites, it helps you make informed business decisions with coverage of breaking economic news, latest workload and tender prices forecasts.

There is also a snapshot of current freelance labour rates and a guide to the best and worst payers within the major Tier 1 contractors.

For those looking to navigate the ever-changing world of contract and employment law, lawyers at Fenwick Elliot also give you the benefit of their expert insight.

And, of course, it’s all completely free for readers.

Click here to take a look.

Latest news

Contractor jailed for filling old quarry with hazardous waste

M E Foley (Contractors) boss jailed for over two years
3 days ago

Bids invited for £540m JV North contractors framework

Race start for places on northern housing association consortium new-build framework
2 days ago

Contractor moves to four-day-week to boost work/life balance

Building and renovation specialist Orocco to give all site and office staff Fridays off
2 days ago

Scaffolding collapses on top floor of apartment site

Roads sealed off around resi job after scaffolding damaged during high winds
3 days ago

£250m South East Consortium housing framework winners

Vistry and Wates gain places on major projects lot for first time
3 days ago

Construction buyers report strong “spring surge” in output

Industry output expands at sharpest pace since September 2014
3 days ago

Three consortia shortlisted for Britain’s longest road tunnel

Murphy joins international line-up of firms shortlisted for £2.3bn Lower Thames Crossing
4 days ago

Arup staff have bank details hacked by cyber criminals

Ransomware attack sees staff data compromised at consultant
4 days ago

Skanska to switch all site equipment to vegetable oil power

Contractor wants to go all electric or hydrogen powered when technology allows
4 days ago

Lead time warnings on cement and aggies deliveries

Heavyside products and plastic drainage products join supply bottleneck list
4 days ago

Taylor Woodrow secures £328m Somerset A358 upgrade

Vital 9-mile section of A358 will be dualled to the M5
4 days ago

11 win £350m southern house building deal

Housing association Abri names new construction partners
3 days ago

Leeds Bradford Airport £150m plan put on hold

Choice to hold a public inquiry delayed by communities secretary
4 days ago

St Modwen teams up with Oxford college for resi and logistics scheme

Worcester scheme for 1,250 homes and 900,000 sq ft of warehouses
4 days ago

Renewal race for £1.8bn north west framework

Procure Partnerships calls up contractors for second-generation deal
5 days ago

Safety inductions to go 4D on Balfour/Vinci HS2 sites

Online training tool based on specific sites set to boost safety awareness
5 days ago

Contractors called up for £650m housing framework

CEF framework will be used by eight housing associations in the north
5 days ago

Piling starts on £100m Edmonton recycling centre

Taylor Woodrow assembles piling experts from sister VINCI companies
4 days ago

Select Plant electric crane ready to start on site

Liebherr crawler takes 4.5hours to charge
5 days ago

Tarmac/Kier to upgrade London highways in Barnet

£25m highways maintenance contract will run for two and a half years
4 days ago

Hill to build 200 homes for £500m Oxford scheme

Homes to be built in first phase of Oxford North life sciences district
5 days ago

Controversial IR35 changes come into force

Freelance contractors hit at 'worst possible time' by tax shake-up
6 days ago

B&K bags £10m Keele Uni innovation centre

Work to start on seventh innovation centre within in University Enterprise Zone
5 days ago

Galliard and O’Shea set up retirement home partnership

O'Shea will build first £40m retirement village near Henley-on-Thames
6 days ago

Balfour takes first works deal on HS2 phase 2a to Crewe

Under £52m contract, Balfour will create new woods and wetlands
6 days ago

SSE Contracting sold to private equity firm Aurelius

Deal will see 1,900 M&E staff get new owners
1 week ago

Developer Dominvs appoints new Construction Director

Former Multiplex project leader John Ko joins from Goldman Sachs
6 days ago

Plans in for over 700 homes near Birmingham HS2 station

Plan for five blocks of flats up to 15 storeys high at New Bond Street in Digbeth
6 days ago

Race starts for £1.9bn Lower Thames Crossing roads

Roads North of Thames will be worth more than double the Kent Roads contract
2 weeks ago

Skanska bags £135m revamp of Canary Wharf’s first office

30 South Colonnade to get a major overhaul and extra three floors
2 weeks ago

Contractor services