Buyers report 24-year-high in construction output growth

Grant Prior 2 years ago
Share

Construction buyers reported industry output growing at its fastest rate since 1997 last month.

The bellwether IHS Markit/CIPS UK Construction PMI Total Activity Index hit 66.3 in June, up from 64.2 in May, to record the strongest rate of growth for 24 years.

But materials shortages saw suppliers’ delivery times length to the greatest extent since the survey began as price increases hit record levels.

Tim Moore, Economics Director at IHS Markit, said: “June data signalled another rapid increase in UK construction output as housing, commercial and civil engineering activity all expanded at a brisk pace.

“Total new orders expanded at one of the strongest rates since the summer of 2007, mostly reflecting robust demand for residential projects and a boost to commercial work from the reopening UK economy.

“Supply chains once again struggled to keep up with demand for construction products and materials, with lead times lengthening to the greatest extent since the survey began in April 1997. Survey respondents widely reported delays due to low stocks of building materials, shortages of transport capacity and long wait times for items sourced from abroad.

“Purchasing prices and sub-contractor charges both increased at a survey-record pace in June, fuelled by supply shortages across the construction sector. Escalating cost pressures and concerns about labour availability appear to have constrained business optimism at some building firms. The degree of positive sentiment towards the year-ahead growth outlook remained high, but eased to its lowest since the start of 2021.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, added:”A wave of new orders overwhelmed supply chains again this month where stock levels could not keep up with building work accelerating at the fastest rate since June 1997.

“The meagre availability of raw materials placed obstacles in the path of stronger workflows where supplier delivery times extended into record-breaking territory once again and surpassed the height of disruption when the pandemic first hit.

“A lack of delivery drivers and logistics difficulties for EU imports left stock undelivered or unavailable and construction companies waited while costs mounted. Construction’s heavy load remains inflation rising to its highest rate since April 1997 as a staggering 86% of respondents reported paying more for their goods in June.

“These malfunctions in supply chain performance may be a global issue but this doesn’t help UK builders who are ready but unable to return fully to projects which was reflected in the lowest optimism since January. This surge in activity will lose momentum while labour availability along with key materials remain elusive.”

Latest news

Gove issues six weeks ultimatum to sign building safety contract

Developers told to sign Government contract issued today or be banned from building homes
4 hours ago

Firm fined £120,000 for lifting two builders in a telehandler bucket

Rochdale builder Hoyle Developments fined after repeated safety breaches
3 days ago

Hunt quashes reports HS2 will stop at Old Oak Common

Chancellor says no "conceivable circumstance" where HS2 would not terminate in Central London
2 days ago

London Chiswick roundabout 24-storey tower approved

Plan for 255 flats and offices finally passed after four previous schemes failed to proceed
3 hours ago

Construction forecast to fall by nearly 5% this year

Private new build housing and RM&I to drive fall but infrastructure growth will also slow
3 hours ago

Mace wins green office block at famous Fleet Street pub site

Contractor to build new 12-storey block pioneering latest sustainable construction methods
4 hours ago

Firms readied for raft of net zero and building safety frameworks

Procurement specialist LHC to tender five mission zero retrofit and building compliance deals
3 days ago

Plans in for two Derby city centre schemes of 1300 homes

Eagle Quarter and Bradshaw Way schemes to breathe life into Derbion centre area
3 days ago

United Living names new infrastructure services MD

Former SSE Contracting operations director John Farrell joins multi-service contractor
3 days ago

Sunak promises Bill to build £100m Holocaust Memorial

Holocaust Memorial Bill will update historic legislation allow the building of a new memorial in London
3 days ago

Mace Interiors to transform Hanover Square office block

Refurbishment work to start this year on major revamp of Mayfair building
4 days ago

Garden village in Darlington gets £43m infrastructure cash

Transport and highways work will pave way for 2,000 new homes
4 days ago

Plans in for Lendlease £1.9bn Birmingham Smithfield scheme

Ambitious plans for City's old market area advance with enabling works hoped to start this year
5 days ago

TClarke on track for £500m turnover this year

Building services specialist sees 2022 revenue and profit up by around a third
4 days ago

McAlpine tenders M&E work at £340m Museum of London job

Demolition and first MEPH work packages come out to bid
4 days ago

BAM signs off on £65m Manchester First Street office job

Briggs & Forrester lined up for MEP package
4 days ago

Eurocell gets £1m insurance payout after cyber attack

UPVC giant details cost-cutting round as market weakens
4 days ago

Mace on board for £440m Manchester Airport upgrade

Green light for second phase of airport transformation programme
5 days ago

Inland Homes losses now set to hit £91m

House builder sells land as construction problems and slower sales wreck balance sheet
5 days ago

Plans in for Stoke on Trent city centre mixed-use scheme

Etruscan Square scheme consists of an arena, 300 homes, hotel and multi-storey car park
5 days ago

Landsec unveils latest £850m Buchanan Galleries plan

Subject to planning, earliest date for first construction would be summer 2024
6 days ago

Van Elle soars to record revenue in first six months

Revenue up a third to £80m at piling specialist with improved order levels ahead
5 days ago

Work starts on BSI Kitemark for MMC homes

Government backs new British Standard to lift barrier to modern methods of construction
5 days ago

Watchdog blasts “rushed” UK Infrastructure Bank

Funding deals only seen so far on broadband and solar farms projects
5 days ago

60,000 Grandfather Rights skills cards soon to be invalid

New guidance issued for how experienced workers can get new CSCS cards before end of 2024
6 days ago

Worker dies after cardiac arrest in HS2 site office

Colleagues and emergency services tried to save man after he collapsed in tunnelling office
6 days ago

Mace wins £150m life sciences centre

Construction to start in April creating 1,000 jobs on London's Euston Road
7 days ago

Redrow switches to heat pumps as standard in all new homes

House builder commits all new detached homes from this month to have heat pumps and underfloor heating
6 days ago

Gilbert Ash set for Barnfield College next phase

Contractor understood to have won latest £26m deal at Luton site
6 days ago

Willmott Dixon wins £48m zero-carbon West Sussex school

Work to start in April on Passivhaus-designed Bedelands Academy secondary school project
6 days ago

Contractor services