UK construction industry growth recovers despite supply pressure

Growth in the UK construction sector picked up again last month, according to new figures, despite supply turmoil affecting businesses.

The closely followed IHS Markit / CIPS UK Construction Purchasing Manager Index (PMI) reached a reading of 52.6 in September to 54.6 in October.

Readings above 50 are considered growth sectors.

Tim Moore, director of IHS Markit, said:

More than half of the companies surveyed reported long delivery times between suppliers, with only 2% improving.

Delays were overwhelmingly associated with a shortage of transport drivers and congestion in international transport.

Meanwhile, the latest data also show that while overall inflation has fallen to its lowest level in six months, input costs have risen even further.

Approximately 73% of companies say purchase prices rose in October, indicating higher energy and commodity prices.

Nonetheless, activity in this sector improved against the backdrop of certain improvements in the housing construction sector, with a measurement of 55.4 that month.

Moore said:

“But volatile prices and supply conditions have increased business uncertainty and continued to hinder contract negotiations.”

According to the report, this resulted in overall growth in new orders flat at the eight-month lows seen in September.

Duncan Brock, Group Director of the Chartered Institute of Procurement & Supply (CIPS), said:

“But due to supply pressures and staff shortages, uncertainty and instability are not yet guaranteed to be behind us.”