Construction output shows fastest rise in four months

The bellwether IHS Markit/CIPS UK Construction PMI Total Activity Index hit 55.5 in November – up from 54.6 in October.

There were also signs that the worst phase of supplier delays may have passed, with the portion of survey respondents citing longer delivery times falling to 47% in November compared with a peak of 77% in June.

A steeper rise in commercial construction (index at 56.5) helped offset a sight showdown in house building growth (54.7, down from 55.4).

Civil engineering was the weakest-performing area in November (53.9), although the latest rise in activity was the largest since August.

UK 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.

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.

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.

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.

Tim Moore, Director at IHS Markit, which compiles the survey said: “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.”

updated: 07/12/2021