Construction Activity Grows At Fastest Rate In Seven Years

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Construction Activity Grows At Fastest Rate In Seven Years

Construction Activity Grows At Fastest Rate In Seven Years

Construction activity surged in March, growing at the fastest rate since September 2014, according to the latest Purchasing Managers’ Index (PMI), which shows that the domestic economy is recovering more quickly than Brexit- and pandemic-affected trade flows.

The Guardian reports that the IHS Markit/CIPS construction PMI registered 61.7 last month, a sharp increase on the 53.3 it reported in February. Any reading above 50 indicates activity levels are increasing.

Commercial construction reported its biggest rise in work since February, with its 62.7 reading the highest reported for six and a half years. Housebuilding was at 64 and civil engineering stood at 58.

CIPS (Chartered Institute of Procurement & Supply) group director Duncan Brock said: “Construction was full of the joys of spring in March with a sudden leap into solid growth fuelled by across-the-board rises in workloads in all sectors. The commercial pipeline was particularly spectacular giving its best performance since late-2014.”

Public-sector owned procurement specialist Scape’s chief executive Mark Robinson said the current activity levels were testament to the industry’s resilience. “The sustained output growth recorded in March is a far cry from the record-low levels reported this time last year, reaffirming just how far the industry has come since the first lockdown,” he said.

Tim Moore, economics director at IHS Markit, said: “March data revealed a surge in UK construction output as the recovery broadened out from house building to commercial work and civil engineering.”

He added that total activity expanded to the greatest extent for six-and-a-half years as residential spending remained robust, commercial projects restarted and infrastructure contract awards moved ahead.

A return to delayed jobs, particularly in the hospitality, leisure and office markets, has been cited as the driving force for new activity, as well as an increase in new orders, which has led to a jump in job creation to its highest level in two years.

Gareth Belsham, director at property consultancy Naismsiths, said: “The omens in February were good, as new orders began to pour in,” Belsham said. “But March was the month when construction really put the pedal to the floor – and output is now surging across all sectors of the industry.”

However, the increased activity combined with the sharpest increase in inflation rates since August 2008 has contributed to a rise in construction costs. Reports of a shortage in the recent months have seen cement, aggregates and plastic products to its list of items facing supply issues.

Tim Moore suggests that supply issues have had little impact on business confidence.

“Continued pressures on supply chains are expected in the near-term, but these concerns did little to dampen confidence about the business outlook,” he said.

“The latest survey pointed to the strongest growth projections across the UK construction sector since those reported during a post-election bounce back in June 2015.”

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