Steady as she goes
The latest IHS Markit/CIPS UK Construction PMI® figures have been released for December.
The seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI®) posted 52.2 in December, down from 53.1 in November but above the 50.0 no-change threshold for the third month running.
As a result, the latest reading signals a moderate expansion of overall construction output at the end of 2017. While recovery remains uneven, the strong residential market is bolstering the industry against losses in the commercial sector.
New order levels have also risen, reaching a seven month high, which in turn is leading to the strongest job creation levels since June 2017. In contrast, work is falling on commercial projects and civil engineering output has not moved for the last quarter.
While a sharp rate of input price inflation continued in December, and intense supply chain pressures remain, across the industry.
Respondents to the survey indicate that house building is a key engine of growth, supported by government backing in the sector, seeing 16 consecutive months of growth.
Speaking to respondents, researchers found that house building remains a key engine of growth, with government focus on the sector helping to drive residential work into its 16th consecutive month of growth. This has also led to a rise in new construction projects, with new orders growing the fastest since May 2017.
Looking the other way, commercial work has seen falling figures since July, while civil engineering work has stabilised, ending a three-month period of decline.
Peter Vinden, Managing Director of The Vinden Partnership – a leading multi-disciplinary consultant company to the built environment, said: “The latest PMI® figures show the resilience of the construction industry. Navigating a tricky 2017, both politically and economically, there were bound to be some blows, however, industry support through the government housing drive is helping it see new shores.
“Clients are more willing to commit to projects, which in turn is leading to a growth in employment.
“However, price rises in products are a hangover of Brexit, which is set to continue throughout 2018, as well as the continued rises in the cost of imported products.
“2018 is set to continue the trend, with subdued confidence across the sector, belying the climate of continued uncertainty.”