{"id":102567,"date":"2021-12-07T15:41:15","date_gmt":"2021-12-07T15:41:15","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=102567"},"modified":"2022-02-06T19:49:15","modified_gmt":"2022-02-06T19:49:15","slug":"construction-output","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/construction-output\/102567\/","title":{"rendered":"Construction output shows the fastest rise in four months"},"content":{"rendered":"

HIS Markit<\/a> and CIPS UK<\/a> report that UK construction companies have indicated a sharp increase in business activity, and the fastest upturn in commercial work<\/h2>\n

Signs have shown that the worst phase of supplier delays may have passed, with a portion of survey respondents citing longer delivery times falling to 47% in November, compared with a peak of 77% in June.<\/p>\n

Rapid input price inflation<\/a> persisted and driver shortages<\/a> added to cost pressures, but the latest overall rise in operating expenses was the least marked for seven months.<\/p>\n

At 55.5 in November, up from 54.6 in October, the headline seasonally adjusted IHS Markit\/CIPS UK Construction PMI. Total activity index signalled an accelerated expansion of overall construction activity.<\/p>\n

The index has now posted above the 50.0 no-change value for ten consecutive months and the latest reading pointed to the strongest rate of expansion since July.<\/p>\n

A rise in commercial construction<\/h3>\n

A steeper rise in commercial construction with an index rating of 56.5, helped offset a sight showdown in house building growth (54.7, down from 55.4).<\/p>\n

Civil engineering was the weakest performing area in November, although the latest rise in activity was the largest since August.<\/p>\n

Another solid increase in new business volumes helped to boost construction output during November, with this index hitting a three-month high.<\/p>\n

Survey respondents mostly noted that improving client demand had led to increased numbers of new enquiries, although some firms suggested that supply recovery led by an accelerated rise in commercial work constraints had a negative impact on confidence.<\/p>\n

Construction firms sought to increase their business capacity in November, as signalled by another steep rise in staffing numbers. Despite this, the overall speed of job creation<\/a> eased to an eight-month low.<\/p>\n

Sub-contractor usage also increased at a slower pace in November, as the latest survey indicated that sub-contractor availability decreased to the least marked extent since May.<\/p>\n

A rise in demand for construction products and materials<\/h3>\n

November data pointed to another rise in demand for construction products and materials, and higher levels of input buying reflected a combination of increased workloads and efforts to build inventories due to supplier delays.<\/p>\n

The index measuring overall supplier performance reached its highest level since April but remained negative. Around 47% of the survey panel reported longer lead times in November, while only 4% reported an improvement.<\/p>\n

Lack of transport availability due to driver shortages has also continued to impact supplier performance, however firms have noticed an improvement in specific material items, such as timber<\/a>. Around 72% of the survey panel reported an increase in purchase prices in November, while only 3% reported a decline.<\/p>\n

Rise in commercial building compensated for slowdown in house building<\/h3>\n

Tim Moore, director at IHS Markit said: “November data highlighted a welcome combination of faster output growth and softer price inflation across the UK construction sector.<\/p>\n

\u201cCommercial building led the way as recovering economic conditions ushered in new projects, which helped compensate for the recent slowdown in house building. Major infrastructure work also boosted construction activity in November, as signalled by the fastest growth in the civil engineering category since August.<\/p>\n

“Input price inflation remains extremely strong by any measure, but it has started to trend downwards after hitting multi-decade peaks this summer. The latest rise in purchasing costs was the slowest since April, helped by a gradual turnaround in supply chain disruption and a slight slowdown in input buying.<\/p>\n

\u201cPort congestion and severe shortages of haulage capacity were again the most commonly cited reasons for longer lead times for construction products and materials<\/a>.”<\/p>\n

\u2018Signs of recovery in supply chain performance\u2019<\/h3>\n

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, also commented: \u201cUK construction enjoyed a rebound in November with the fastest level of output growth for four months as supply chain managers increased their purchasing activity to meet a strong pipeline of new building projects.<\/p>\n

“Commercial orders were the strongest, picking up the slack from the subdued housing and civil engineering sectors and demonstrating that business confidence in the UK economy was improving.<\/p>\n

“Adding to this positivity was signs of recovery in supply chain performance with just 47% of construction firms reporting longer waiting times, which is the smallest number for eight months.<\/p>\n

“Even with this glimmer of hope that the pressure on deliveries was easing, purchasing remained at higher level to counteract disruptions from ongoing driver shortages and port delays as supply chain managers bought more than their immediate need.<\/p>\n

“Job hiring growth was still maintained in November but was the weakest since March. Builder optimism was somewhat flat as the costs of building still remained high and firms struggled to stay competitive.”<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

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