Housebuilding Surge Fuels Six-Year High

The planned development of Northwick Park

UK construction activity boomed in March with the purchasing managers' index reaching 61.7 - the highest reading since the second half of 2014.

This was a sharp rise on February's 53.3 figure with housebuilding the best performing category - the fastest growth since July 2020.

Chartered Institute of Procurement and Supply group director Duncan Brock said: "This upturn led to a significant boost in hiring levels with the fastest upturn in job creation since December 2018 offering a clear sign that companies are feeling more positive in planning for new builds and refurbishments of current properties."

Survey respondents commented on higher workloads due to greater spending on residential construction work and rising new home sales.

 

Commercial installations

Strong activity increases were also seen in commercial construction and civil engineering in March, the highest index readings since the second half of 2014.

There were also reports of a boost from major infrastructure projects and mobilisation of delayed initiatives in hospitality, leisure, and office development.

 

Pent-up demand

Growth projections were the most upbeat since June 2015, reflecting confidence in the UK economic outlook, the improving pandemic situation and pent-up demand.

Hank Zarihs Associates said lenders had noticed that requests for development and refurbishment finance were buoyant.

 

Supply constraints point to higher material costs

However, higher demand for construction products and materials has contributed to longer wait times. Around 41 per cent of the index survey panel reported longer delivery times from suppliers in March, while only one per cent saw an improvement. Supply constraints and logistics issues were commonly reported by construction companies, especially for imported items.

The Construction Leadership Council, CLC, is advising builders and installers to plan ahead as shortages for products and materials are expected to intensify over the next two to three months. It pointed out that not enough timber was being produced and that other countries such as America and China were paying more to secure supply. Plastics, cement and aggregates, steel, roof tiles, bricks and imported products such as screws, fixings, plumbing items and sanitaryware are all scarce.

Picture: The planned development of Northwick Park.

 

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Article written by Cathryn Ellis
15th April 2021

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