The latest Markit survey has revealed while UK construction growth hit an eight-month high, costs have skyrocketed reaching levels not seen since 2011
Construction growth reached an eight-month high in November, it has emerged. The latest Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) moved from 52.6 to 52.8 last month. Anything over 50 indicates growth in the sector.
However, the industry also saw costs rocket at the fastest pace since 2011. This was due to the sterling falling after the EU referendum vote.
Tim Moore, senior economist at Markit, said: “UK construction companies experienced a steady recovery in business activity during November, which continues the rebound from the downturn seen over the third quarter of 2016.”
Growth seen in housebuilding
According to the survey, it was improvements in commercial and civil engineering activity, as well as a growth in housebuilding that pushed up the index reading. Furthermore, the resumption of projects that had been delayed until the vote was also a factor.
Moore added: “The brighter picture reflected another solid contribution from residential building and renewed growth in commercial work, which some companies linked to a resumption of projects that had been delayed after the Brexit vote.”
Optimism remains low
However, despite the growth optimism in the sector about the coming year remains at lows not seen since early 2013.
“A number of firms cited uncertainty related to supplier price hikes as an emerging threat to the construction sector, with survey respondents commenting on difficulties forecasting project costs against a backdrop of rapidly changing inflationary pressures,” Moore said.