Construction returns to firm growth in February

Friday March 5 2021

The steepest rise in commercial activity since September has given construction a boost, helping the sector make a solid return to growth after a decline in output at the start of the year. As a whole, the sector has made a recovery, despite housebuilding slowing down due to bad weather and delays with materials.

The rise in activity was caused by contracts that had been delayed earlier in the pandemic, according to respondents to the latest IHS Markit/CIPS Purchasing Managers’ Index (PMI) survey. An increase in infrastructure work from major transport projects was also partly to be thanked.

Recruitment and the rate of job creation, meanwhile, are at their highest since March 2019, due to the increased workloads. While cost burdens have risen sharply during the same period, the firms behind the survey maintained that the successful vaccine roll-out has given the construction sector a sense of optimism not felt for five years.

According to IHS Markit economics director Tim Moore, construction is now the ‘fastest-growing major category of UK private sector output’.
Housebuilding remains ‘the engine of recovery’ for UK construction according to Moore. But with the materials shortage hopefully easing, weather conditions improving as we move towards spring, along with the extended support announced in the March budget, the industry is in a strong position to gather enough momentum for a full recovery.