UK builders hammered by supply shortages

SHORTAGES of staff and materials have combined with rising prices to slam the brakes on Britain’s construction industry.

In the latest sign of the problems facing UK firms, research group IHS Markit said its index of activity in the sector hit an eight-month low of 52.6 last month.

The report fuelled fears that the recovery from the Covid recession is running out as shortages and rising prices disrupt business.

Duncan Brock, director at the Chartered Institute of Procurement & Supply, which compiled the report with Markit, said: ‘Construction activity suffered another setback in September, as builders were hammered by staff and material shortages, delivery delays and higher business costs as this phase of the post-pandemic recovery became the shakiest for eight months.’

The index remained above the 50 mark that represents the cutoff between growth and decline. But it was down from 55.2 in August.

The survey showed construction activity cooled across the housebuilding, commercial and civil engineering sectors.

Costs faced by construction companies rose fiercely in September, with 78 per cent of respondents reporting a rise in input prices.

‘The volatile price and supply environment has started to hinder new business intakes as construction companies revised cost projections and some clients delayed decisions on contract awards,’ said Tim Moore, at IHS Markit.

‘The latest survey data pointed to the worst month for order books since January’s lockdown.’

Analysts said staff shortages should ease this month following the end of the furlough scheme.

Official estimates suggest 5.4pc of construction workers were still furloughed in the two weeks to September 5.