Housebuilding underpins wider construction sector

Housebuilding underpins wider construction sector

Construction output growth eased slightly in December, according to the latest IHS Markit/CIPS UK Construction PMI survey. Housebuilding remained strong.

UK construction companies indicated an uneven recovery in business activity at the end of 2017 – according to the adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI). A robust rise in residential building contrasted with falling work on commercial projects and stagnating civil engineering output.

The survey indicated positive signals for the near-term business outlook, with new order growth reaching a seven-month high and job creation the strongest since June. However, it noted that supply chain pressures continued across the construction sector, while input cost inflation picked up from November’s 14-month low.

The seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) posted 52.2 in December, down from 53.1 in November but above the 50.0 no-change threshold for the third month running. As a result, the latest reading signalled a moderate expansion of overall construction output at the end of 2017.

Survey respondents indicated that house building remained a key engine of growth, with residential work expanding for the sixteenth consecutive month in December.

Tim Moore, Associate Director at IHS Markit and author of the IHS Markit/CIPS Construction PMI said: “The UK construction sector achieved a moderate expansion of business activity at the end of 2017, although the recovery remained uneven and slowed overall since November. Construction companies indicated that another strong contribution from house building helped to offset subdued civil engineering activity and reduced volumes of commercial work.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, said: “The housing sector was the strongest performer again and materials for residential building were in greater demand fuelling longer delivery times, shortages of key materials and sharper input cost rises.

Related posts

Sign up for our regular free newsletter
Sign me up