IHS Markit/CIPS UK Construction Total Activity Index was at 53.3 in February
Following a setback at the beginning of the year, UK construction companies delivered a robust return to growth in February, according to survey compiled by IHS Markit.
PMI data also revealed that new orders had regained momentum, as well as more projects beginning, amid economic optimism.
The seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index was at 53.3 in February, up from 49.2 the month before. Any measure above 50 signals a an increase on overall construction output.
Despite lockdowns, the index has registered above the 50.0 no-change mark in eight of the past nine months.
Residential work remained the strongest area of growth, although the speed of recovery eased slightly since January.
FTSE 100 construction companies, including Persimmon and Taylor Wimpey, have propped up London’s blue-chip index in recent months, as other sectors have struggled through the pandemic.
The industry received a boost yesterday as the Chancellor pledged to “stand behind home buyers” during his budget speech in the House of Commons.
Tim Moore, Economics Director at IHS Markit, commented on the survey’s findings:
“Construction work regained its position as the fastest-growing major category of UK private sector output in February. The rebound was supported by the largest rise in commercial development activity since last September as the successful vaccine rollout spurred contract awards on projects that had been delayed at an earlier stage of the pandemic,” Moore said.
“House building is still the engine of recovery for the construction sector, although there was a loss of momentum since January as adverse weather and longer wait times for materials contributed to some temporary delays on site.”
“Stretched supply chains and sharply rising transport costs were the main areas of concern for construction companies in February. Reports of delivery delays remain more widespread than at any time in the 20 years prior to the pandemic, reflecting a mixture of strong global demand for raw materials and shortages of international shipping availability. Subsequently, an imbalance of demand and supply contributed to the fastest increase in purchasing costs across the construction sector since August 2008.”
