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Fastest rise in construction output for four months

Activity Index

Sharp increase in construction business activity in November led by upturn in commercial work

UK construction companies indicated a sharp increase in business activity during November, led by the fastest upturn in commercial work since July as clients continued to boost spending in response to the reopening of the UK economy.

There were signs that the worst phase of supplier delays may have passed, with the portion of survey respondents citing longer delivery times falling to 47% in November, compared with a peak of 77% in June.

At 55.5 in November, up from 54.6 in October, the headline seasonally adjusted IHS Markit/CIPS UK Construction PMI Total Activity Index signalled a robust and accelerated expansion of overall construction activity.

The index has now posted above the 50.0 no-change value for 10 consecutive months and the latest reading pointed to the strongest rate of expansion since July.

A steeper rise in commercial construction (index at 56.5) helped offset a sight showdown in house building growth (54.7, down from 55.4).

Civil engineering was the weakest-performing area in November (53.9), although the latest rise in activity was the largest since August.

Another solid increase in new business volumes helped to boost construction output during November, with this index hitting a three-month high.

Survey respondents mostly noted that improving client demand had led to increased numbers of new enquiries, although some firms suggested that supply constraints had a negative impact on confidence.

According to Tim Moore, director at IHS Markit, who compile the survey, November data highlighted a welcome combination of faster output growth and softer price inflation across the UK construction sector.

‘Commercial building led the way as recovering economic conditions ushered in new projects, which helped compensate for the recent slowdown in house building,’ he said.

‘Major infrastructure work also boosted construction activity in November, as signalled by the fastest growth in the civil engineering category since August.’

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