Construction growth hits surprise four-month high, report buyers

4 December 2018 | By Neil Gerrard

The construction sector enjoyed “solid” growth in November, reaching a four-month high despite relatively subdued levels of business confidence.

That’s according to the latest IHS Markit / CIPS UK Construction PMI survey of construction buyers, which found that growth of new work has picked up since October, with rising client demand underpinned by a “robust and accelerated” expansion of employment.

In fact, the survey recorded the fastest rate of job creation since December 2015, despite ongoing concerns about Brexit’s possible effects, which is weighing on growth projections over the next 12 months.

The IHS Markit/CIPS UK Construction Total Activity Index registered 53.4 in November, up from 53.2 in October, to remain above the 50.0 no-change mark for the eighth successive month.

Residential building was the fastest-growing area of work in November, with the latest rise in housebuilding activity the strongest in three months.

Latest data also pointed to sustained increases in commercial work and civil engineering activity.

Tim Moore, economics associate director at IHS Markit, which compiles the survey said: “November data indicates that the UK construction sector remains in expansion mode, with resilient business activity trends seen for housing, commercial and civil engineering activity. The latest overall rise in construction output was the fastest since July, helped by a stronger contribution to growth from house building activity.

"Higher levels of new work were recorded for the sixth month running in November, which resulted in a robust and accelerated rise in staffing numbers. The latest upturn in employment was the fastest for almost three years. A number of construction firms noted that greater demand for staff had led to upward pressure on salaries in November.

"Business confidence regarding the year ahead outlook for construction work picked up from October's recent low, but remained weaker than seen on average in the first half of 2018. Survey respondents widely commented that Brexit-related uncertainty had held back business optimism in November."

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