News for Tool Hire, Equipment Hire & Plant Hire and Rental Professionals

Mixed building figures

5 February 2021

Mixed building figures

After seven consecutive months of growth, UK construction output showed a marginal decline in January, according to the monthly figures from the PMI survey compiled by IHS Markit for the Chartered Institute of Procurement & Supply.

The index dropped to 49.2, marginally below the no-change 50 figure, compared with 54.6 in December. However, home building activity remained in positive territory at 57.1, which will be pleasing news for many tool and plant hirers.

The survey reported a slowdown in new orders, with respondents citing client hesitancy about the third lockdown’s impact and the near-term economic outlook.

Interestingly, construction companies continued to experience cost pressures driven by rising prices of plaster, steel and timber, as well as longer lead times caused by transport disruption.

Tim Moore, economics director at IHS Markit, said that “rising steel and timber costs led to the fastest rate of input price inflation for just over two-and-a-half years.”

If prolonged, the squeeze on the construction sector could lead to pricing pressures along the supply chain, and perhaps hirers will need to be ready to respond to contractors wanting to reduce hire rates. So next month’s figures will again make for interesting reading.

Nevertheless, with the government’s stated commitment to ‘build, build, build’ and the fast rollout of coronavirus vaccinations - which led the to the Bank of England governor suggesting yesterday that the inoculation programme “is going to support a sustained recovery throughout the rest of the year," there are still grounds for optimism.

Photo: Michael Gaida/Pixabay


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