New figures have revealed construction output in the UK has risen at its fastest pace for five months despite declines in commercial and civil engineering activity.

The latest IHS Markit/CIPS UK Construction PMI posted 53.1 for November, up from 50.8 in October and signalling a solid rate of business growth across the sector.

With business activity rising at the strongest rate since June, new orders and employment numbers also increased to the greatest extent in five months.

House building projects were the main the engine for growth in activity, with respondents suggesting resilient demand and a supportive policy backdrop had driven upturn in residential work.

Companies also indicated a moderate rebound in new orders in November, with the rate of expansion the fastest for five months. Anecdotal evidence cited a general improvement in client demand after a soft patch this summer.

With higher levels of new work helping to support a moderate rise in staff numbers and input buying, lead-times for construction products and materials lengthened sharply, linked to pressure on supplier capacity. However, cost inflation eased to its least marked for 14 months, with some firms reporting signs that exchange-rate driven price rises had started to lose intensity.


Commercial construction remains the weakest performing area of activity in November, with firms noting Brexit-related uncertainty and the subdued economic outlook had held back spending among clients. In addition, civil engineering activity fell for the third successive month, representing the longest phase of decline seen for over four years.

However, the latest drop on civil engineering projects was marginal, with firms commenting on hopes that future tender opportunities on infrastructure programmes (particularly energy and transport) would help to support workloads.

Overall business confidence for the year ahead remained among the most subdued since mid-2013, which Is linked to heightened political and economic uncertainty. Yet optimism has risen from October's 58-month low, helped by a modest recovery in new invitations to tender during the latest survey period.

Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement & Supply, said: "At last the construction sector, has picked its feet up with the biggest overall improvement in five months, underpinned by a moderate rise in new orders, but the strongest since June.

"It appears that policy support and a small recovery in the UK economy has boosted sentiment and encouraged clients to come out of their shells and start building again. The housing sector was the primary driver of growth increasing at the fastest rate for almost half a year.

"However it is private sector companies that need to commit to big ticket spending, with commercial development still underperforming as persistent Brexit uncertainty continues to bite. Concerns over civil engineering in particular are also prevalent with its downward course the longest since 2013 and linked to a shortfall of new tender opportunities.

"Across construction supply chains, delivery times have been under pressure, as materials were in higher demand, while stocks remained in short supply. Lead-times from vendors have now deteriorated in every month for over 7 years.

"Overall, the sector showed an incremental improvement, but business optimism was on the rise and up from last month's five-year low. Perhaps the darkest days are behind the sector with fresh impetus on the horizon for the New Year."

(LM)