Construction activity rises

by Tim Wood



Strengthening order books have played a major part in keeping the UK construction sector buoyant, according to the latest Chartered Institute of Purchasing and Supply purchasing managers' monthly survey.

Almost a third reported an increase in workload in August compared to the previous month, while improving market conditions and increased business and consumer confidence were also major factors behind the latest rise in construction activity.

However, the sustained strength of demand placed further pressure on suppliers in August and an increasing number were unable to expand capacity sufficiently to meet orders in the short term.

Average delivery times lengthened as a result with just under a quarter of respondents reported delays in receiving materials from suppliers. The survey also highlighted further input price inflation reflecting strong levels of demand for a wide range of construction materials and suppliers' ability to raise prices for these goods.

Construction companies also took on more staff last month in an effort to expand capacity to meet rising workloads and expectations of future growth, although the availability of sub-contractors continued to fall.

As to the future, well over half of purchasing managers surveyed expected higher activity levels as a result of improving business conditions and the implementation of planned expansion programmes. Just 5 per cent anticipated a downturn.

Roy Ayliffe, CIPS director of professional practice, said: "As the construction sector remains buoyant with rising activity levels and strengthening order books, the challenge to purchasing mangers is increased capacity constraints in the supply of materials which has led to a further sharp rise in input prices."