Construction firms’ activity bounced back in November thanks to the UK economy reopening and a smoother supply chain, according to Purchasing Managers’ Index, PMI.
The index was up at 55.5 for the month compared with 54.6 in October pointing to the strongest point of expansion since July and the tenth consecutive month above the 50 no change level.
Chartered Institute of Procurement and Supply group director Duncan Brock said: “Commercial orders were the strongest, picking up the slack from the subdued housing and civil engineering sectors and demonstrating that business confidence in the UK economy was improving.”
A steeper rise in commercial construction at 56.5 helped offset a slight slowdown in house building growth of 54.7 – down from 55.4. Civil engineering was the weakest performing area in November at 53.9, although the latest rise in activity was the largest since August.
New business volumes’ solid increase helped boost construction output during November, with this index hitting a three-month high.
Supply chain issues ease
The portion of survey respondents citing longer delivery times fell to 47 per cent in November compared with a peak of 77 per cent in June.
“Even with this glimmer of hope that the pressure on deliveries was easing, purchasing remained at a higher level to counteract disruptions from ongoing driver shortages and port delays as supply chain managers bought more than their immediate need,” said Mr Brock.
November saw another steep rise in staffing numbers although, the overall speed of job creation eased to an eight-month low. Sub-contractor usage also increased at a slower pace in November with sub-contractor availability decreasing to its least marked extent since May.
Brokers Hank Zarihs Associates said the easing in supply chain issues was good news for SMEs and that development finance lenders would be keen to offer loans to cope with inflationary pressures.