Survey sees construction growth 'slow' in March

Survey sees construction growth 'slow' in March

According to a recent survey by data firm Markit and the Chartered Institute of Procurement and Supply (CIPS), growth in the UK's construction industry slowed down during March. Amongst other figures, the month saw the construction purchasing managers' index fall to 57.8.

CIPS stated that some firms attributed slower momentum to concerns about the looming General Election; the data suggested builders were delaying decisions before a new government emerges. Employment in the sector rose at the slowest rate in more than a year and shortages of materials and subcontractors pushed up prices. The survey noted that the sub-contractor availability continued to fall sharply, which in turn contributed to the steepest increase in sub-contractor charges since the survey began in April 1997.

However, even as the month seemed to be a depressing step back after the promising figures in February when the purchasing managers' index rose to 60.1, its highest level since October and the housing, commercial and civil engineering sectors all showed signs of accelerating growth, it’s not certain that the decline in the industry is back to stay. The survey saw confidence rise to a nine-year high and more than half of the survey panel (57%) forecast a rise in output over the year ahead, while only 3% expect a fall, which equates to the strongest degree of construction sector optimism for just over nine years.

New business volumes continued to rise at a strong pace in March, although the rate of expansion eased from February’s four-month high. It is worth noting that companies that reported an upturn in new orders generally cited improving economic conditions and greater underlying client demand.

Commenting on the report, David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said: "The construction sector’s strong recovery took on a gentler, quieter pace, with the housing sector continuing to lead the way ahead – but only just, and with the commercial sector a close second.

The main take-away from this month must be the highest levels of confidence seen in the construction sector for almost a decade. Though there may be some low-level obstacles still to come, the sector gets the green light as there is evidently belief that the future for the construction sector is a sustainable one.”

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