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Positive signs from latest UK Construction PMI data

by Jennie Ward

The latest IHS Market / CIPS data shows robust growth in all categories of construction during March and job creation at its highest for some time, which leads respondents to say “the bounceback is turning into a boom”, and “the sector has shaken” the nerves seen at the beginning of 2021.

The latest UK Construction PMI data has shown that construction output expanded at the sharpest pace since September 2014, with robust growth in all categories of construction activity during March, the fastest rise in commercial work recorded for six-and-a-half years and job creation at a 27-month high.

Responding to the positive news, Gareth Belsham, Director of the national property consultancy and surveyors Naismiths, commented“The bounceback is turning into a boom.

“The omens in February were good, as new orders began to pour in. But March was the month when construction really put the pedal to the floor – and output is now surging across all sectors of the industry.

“Housebuilding work spiked at the fastest rate seen since the record-breaking, gravity-defying jump of last summer. The jump in commercial construction and infrastructure work wasn’t far behind, and is perhaps even more impressive given that these two typically struggle to keep pace with the red-hot residential sector.

“In response to surging demand, building firms are tooling up – hiring people and buying materials – and the pace of job creation is now stronger than it has been for over two years.

“The flipside of all this is a surge in materials prices. With demand far exceeding supply in many areas, cost pressures and wait times for key building materials are starting to build sharply.

“As high streets prepare to reopen in England and Wales and the shackles of lockdown are slowly thrown off, the industry is steeling itself for the release of many months of pent-up demand.

“No wonder optimism among builders is higher than it has been for nearly six years. So far there’s still no sense of the longevity of this boom. But the industry is taking the Prime Minister’s instruction to ‘build build build’ very literally.”

Likewise, Fraser Johns, Finance Director at Beard, felt the numbers showed “the sector appears to have shaken” the nervousness felt at the start of 2021:

“After a big dip in 2020, the construction sector has recorded an impressive bounce back. Primarily driven by strong output in house building, commercial work and civil engineering, March gave reason for optimism for the rest of the year.

“While there was some nervousness at the start of 2021, the sector appears to have shaken these nerves and there is hope that this will be a strong and relatively quick recovery. Job creation was at its highest for over two-years, which is a clear sign the industry is feeling more positive in planning for projects. 

“It certainly won’t be plain sailing from here however, with pressure put on supply chains, which has become evident with material shortages and logistical issues becoming more prevalent.

“With the success of the vaccine rollout and a roadmap for the return to normal in place, confidence should keep building as projects that have been on hold are given the green light.”

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