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

Construction stays strong

10 May 2021

Construction stays strong

Another month, another set of positive construction output figures. But with them come the now rather familiar caveats, too. 

UK construction companies responding to the Purchasing Managers’ Index (PMI) survey compiled by IHS Markit for the Chartered Institute of Procurement & Supply reported the fastest rise in overall new orders since September 2014. 

Activity is spread evenly across civil engineering activity, commercial work and house building.

The headline Index posted 61.6 in April, down only fractionally from March's six-and-a-half year peak of 61.7. Any figure above 50.0 indicates expansion.

House building (index at 61.2) continued to rise at a strong pace, but paused for breath slightly having eased from March's peak (64.0). 

Respondents commented on a boost to client demand from rising business confidence and the reopening of the UK economy. 

However, increased demand for construction products and materials continued to stretch supply chains. The latest lengthening of suppliers' delivery times was the third-greatest since the survey began in 1997, exceeded only by those seen during the lockdown in April and May last year. 

Some firms suggested that Brexit had delayed imports from the EU, and steel, aggregates, cement, timber and transportation were among the most commonly reported items up in price. 

Several other industries are suffering from delays and shortages. Indeed, some car manufacturers have sent workers home temporarily because of a lack of components. 

Hopefully a similar situation won’t lead to construction sites suspending operations, but might some contractors want to off-hire equipment if work flows are disrupted? 

On the plus side, however, demand for equipment for smaller home and garden improvements is booming – even before the decent weather has arrived. 

One hirer I spoke to described it as a win-win: a lack of housing is creating demand for new homes and the products to build them. But that’s also driving up selling prices, and so many owners are simply staying in their current properties and doing them up, hiring the equipment to do so. 

Picture: Story Homes


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