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Construction jobs rise as delayed projects start

Encouraging news as growth in UK construction edged upwards in November against a backdrop of the fastest upturn in employment for almost three years.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index crept up to 53.4 in November, up slightly on 53.2 in October and against the no-change reading of 50.

Growth of new work and client demand underpinned the expansion in employment, which was the fastest since December 2015.

Residential building reclaimed its position as the fastest growing area of construction, while there were sustained increases in commercial work and civil engineering activity.

Duncan Brock, group director at CIPS, said: “Levels of new work improved, and employment numbers increased at their fastest rate since December 2015, as projects finally started after sustained periods of delay. But before the champagne corks start popping, this rise in the overall index was small. Even with optimism at a three-month high, there is currently no indication that this will become a sustained rise as we approach the end of the year.”

Greater demand for construction products and materials contributed to worsening vendor performance – longer delivery times from suppliers have been reported in each month since September 2010.

There was also another sharp rise in input prices, with respondents commenting on higher transportation costs and rising staff salaries.

Business confidence remained relatively subdued, with Brexit concerns weighing on survey respondents’ expectations of the next 12 months.

Brock said: “Constrained supply chains were still underperforming as supplier operations worsened again and to their weakest level for three months. Suppliers reduced their stock levels and reports of raw material shortages gnawed away at efficiency. Adding to this challenging mix, prices for raw materials continued their strong upward trajectory, so the pathway ahead is still far from clear of blockages, Brexit-related or otherwise.”

Tim Moore, economics associate director at IHS Markit, said: “November data indicates that the UK construction sector remains in expansion mode, with resilient business activity trends seen for housing, commercial and civil engineering activity. The latest overall rise in construction output was the fastest since July, helped by a stronger contribution to growth from house building activity.”

Image from Shutterstock

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