Construction activity gathered pace in November

Construction activity grew at a robust rate in November, according to a new survey of the UK construction sector published today (Thursday).

The Construction Purchasing Managers’ Index – a seasonally adjusted register designed to measure the overall health of the construction economy – posted 56.7 in November, rising from October’s level of 55.0 to suggest a stronger rate of growth in overall activity.

Roy Ayliffe, director of professional practice at the Chartered Institute of Purchasing and Supply, said: "Purchasing managers saw the rate of growth across the construction sector pick up during November having slowed down in the previous month.

"Growth was underpinned by an increase in incoming orders, resulting from improving business conditions and rising demand. Firms reported hiring more staff to cope with the increased demand and staffing levels grew at their sharpest rate in almost four years.

"Encouragingly, levels of optimism about the sector’s future remained high, driven by planned expansion and the anticipation of new demand with utilities and infrastructure,” he said.

All three broad sub-sectors of the construction economy showed improvement in November. Housing activity and commercial construction both registered more marked rates of growth than in the previous month, with the latter recording an eight-month high. 

Civil engineering activity rose at a similar modest rate to the previous two months, with expansion far less marked than in the housing and commercial sectors.

New orders grew for the seventy-third month running and at a faster rate than in October, with the seasonally adjusted New Orders Index registering 60.4, from 57.3 the previous month. Over a third of firms had higher levels of incoming orders than the previous month.

Staffing levels in the construction industry grew at the sharpest rate since July 2001 as firms stepped up recruitment in order to deal with higher workloads.

And quantities of materials purchased in November increased at a sharp rate as constructors sought to keep up with demand. This led to delays as suppliers’ capacity constraints and rising volumes of materials awaiting delivery led to bottlenecks and rapidly lengthening average lead-times.

Confidence in the UK construction sector remained robust, with nearly 60% of firms expecting activity to be higher in twelve months’ time. Many firms planned to expand in order to increase capacity, while new work on utilities and infrastructure was anticipated.