Property Expertise and Analysis
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The volume of new orders within the construction industry increased at the sharpest rate in more than six years, according to the latest CIPS/IHS Markit report. November’s orders rose at the fastest speed since October 2014, thanks to increased tender opportunities and improving confidence among clients.
IHS Markit/CIPS UK Construction Total Activity Index
The IHS Markit/CIPS UK Construction Total Activity Index registered at 54.7 in November, up from 53.1 in October. This is the sixth consecutive month in which it has registered above 50.0, demonstrating a solid increase in total construction output.
Tim Moore, economics director at IHS Markit, said: “The latest increase in new orders was the strongest since late-2014, with construction firms reporting a boost from rising client confidence and the release of budgets that had been held back earlier in the pandemic.”
Housebuilding leads November Boost
Housebuilding has contributed most significantly to the November boost, with output at 59.3. Civil Engineering returned to growth in November at 52.3, whilst commercial work increased only marginally at 51.9 and at the slowest rate for six months.
Rising demand for construction products and materials led to another sharp lengthening of lead-times last month with respondents pointing towards transport delays and stock shortages. This is also having a knock-on effect across input prices, with the cost of timber cited as seeing particularly sharp rises.
Employment in Construction
Employment remained a weak spot but the latest fall in staffing numbers was the slowest since February. Despite rising business activity and incoming new work, some firms continue to report ongoing job cuts amid efforts to reduce overheads.
With around 51% of the survey panel forecasting a rise in business activity during 2021, this latest report points to the strongest degree of business optimism across the construction sector since January.
In case you missed them, you can read previous editions here:
RFM Viewpoint: Delving into the Construction Industry November 2020
RFM Viewpoint: Delving into the Construction Industry October 2020
RFM Viewpoint: Delving into the Construction Industry September 2020
RFM Viewpoint: Delving into the Construction Industry August 2020
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