The recovery in UK construction output gained further momentum last month, according to the latest IHS Markit / CIPS UK figures, with overall construction activity expanding at the fastest pace for four years, supported by another sharp rise in new orders.
At the same time, suppliers’ delivery times went on growing to set a new 24-year high, while the product shortages led to the same record rise in purchasing prices.
Once again, housebuilding led the way, increasing at the fastest pace since November 2003. Construction companies indicated another month of sharply rising employment numbers, reflecting efforts to boost capacity and meet incoming new orders. The rate of job creation moderated since May but remained among the fastest seen over the past seven years.
Tim Moore, Economics Director at IHS Markit, which compiles the survey, said: “June data signalled another rapid increase in UK construction output as housing, commercial and civil engineering activity all expanded at a brisk pace. The headline index signalled the fastest rise in business activity across the construction sector for 24 years. Total new orders expanded at one of the strongest rates since the summer of 2007, mostly reflecting robust demand for residential projects and a boost to commercial work from the reopening UK economy. “Supply chains once again struggled to keep up with demand for construction products and materials, with lead times lengthening to the greatest extent since the survey began in April 1997. Survey respondents widely reported delays due to low stocks of building materials, shortages of transport capacity and long wait times for items sourced from abroad.”Purchasing prices and sub-contractor charges both increased at a survey-record pace in June, fuelled by supply shortages across the construction sector. Escalating cost pressures and concerns about labour availability appear to have constrained business optimism at some building firms. The degree of positive sentiment towards the year ahead growth outlook remained high, but eased to its lowest since the start of 2021.”