UK construction PMI hits nine month high in December as costs rise

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Activity in the construction sector grew at the fastest rate in nine months in December, according to the latest UK construction PMI

The latest UK construction PMI has revealed the industry saw growth at the end of last year.

The Markit/CIPS purchasing managers’ index (PMI) rose to 54.2 in December. Anything over 50 represents growth in the sector, and this latest figure is the strongest seen since March.

Rising costs

However, the sector also saw a rise in costs. Weakness of the sterling drove the biggest increase in costs in over five years. This was further exacerbated as shortages of material were reported, with many firms stocking up to beat further price increases in the future. With Brexit firmly pencilled into the diary it is apparent knocks to the sterling could further worsen the construction materials sector in the future.

Survey author Tim Moore wrote: “UK construction companies noted that the weaker sterling exchange rate had resulted in higher costs for a wide range of imported materials.”

Housebuilding saw growth in December, increasing at the fastest rate since January, while civil engineering saw its biggest improvement in nearly two years.

However, demand for commercial projects such as factories and shops remained low. Moore said this reflected “an ongoing drag from subdued investment spending and heightened economic uncertainty.”

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