Construction sector has best month since 2014
THE UK’s construction industry has grown at its fastest monthly rate in more than six years, as house builds soared in March and paused projects were restarted.
According to a closely followed survey, the sector has accelerated since February and created more jobs than at any point in more than two years.
The IHS Markit/CIPS Purchasing Managers’ Index (PMI) rates different sectors of the economy by surveying businesses each month. Any score above 50 is said to show a growing sector.
The construction sector jumped to 61.7 in March, the highest score since September 2014, and up from February’s already healthy 53.3.
“Improving confidence among clients in the commercial segment was a key driver of growth, with development activity rebounding in sectors of the economy set to benefit the most from the improving pandemic situation,” said Tim Moore, IHS Markit economics director.
“The increasingly optimistic UK economic outlook has created a halo effect on construction demand and the perceived viability of new projects.”
Housebuilders scored 64 on the index, their highest since last June, while commercial construction was assigned a score of 62.7 and civil engineering hit 58, their highest scores since the second half of 2014.
Projects delayed because of Covid19 have been restarted in recent weeks, especially for clients in the hospitality, leisure and office development sectors, the survey’s authors said.
Large infrastructure projects helped invigorate the sector as did a rise in new home sales, which is likely due to temporary cuts in tax for homebuyers.
However, March also had the highest increase in the cost of buying materials for the sector since August 2008. Companies pointed towards Brexit and the pandemic as the driving forces behind this.
Max Jones, director in Lloyds Bank’s infrastructure and construction team, said: “Confidence is high among contractors. Little wonder, with infrastructure work boosting order books and enabling firms to plan ahead.
“Many are using the safety of government-led pipelines to invest in adapting their ways of working to be more sustainable and reduce on-site waste, which will stand them in good stead for the future.”