Housebuilding led a sustained rebound in construction activity during December, according to the latest PMI data compiled by IHS Markit. Stronger order books helped to drive the recovery across the construction sector, with survey respondents often citing work on projects that had been delayed earlier in 2020.
The IHS Markit/CIPS UK Construction Total Activity Index posted was above the crucial 50.0 no-change threshold for the seventh consecutive month.
Higher levels of demand also led to a slight rise in employment numbers and greater demand for construction inputs in December. However, stretched supply chains and delays at UK ports resulted in longer delivery times and the fastest rate of input cost inflation since April 2019.
The rate of growth in commercial activity eased to its lowest since the recovery began last June. Civil engineering was the weakest-performing category, with activity falling for the fourth time in the past five months.
Tim Moore, Economics Director at IHS Markit, which compiles the survey: “Overall output growth has slowed in comparison to the catch-up phase last summer, but now it is encouraging to see the recovery driven by new projects and stronger underlying demand.
” Construction companies are hopeful that higher demand will broaden out beyond residential projects in the next 12 months, led by infrastructure spending and a potential rebound in new commercial work from the depressed levels seen during the pandemic.
Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply: “Once again residential building was the strongest sector and construction companies focussed on this segment seem resilient for now. As the appetite for building resources grows in the first quarter of the year however, suppliers will find it difficult to ramp up production quickly to pre-pandemic levels, so we could see even longer delivery times potentially delaying some building projects as post-Brexit disruption also remains an ever-present threat.”