Construction data shows ongoing growth

10 January 2022

December is always a difficult month to predict in terms of hire activity, as construction firms prepare to shut down over the festive period, many personnel have holidays to take before losing their entitlement, and of course the vagaries of the British climate. 

Nevertheless, the Purchasing Managers’ Index (PMI) survey, published by IHS Markit for the Chartered Institute of Procurement & Supply (CIPS), pointed to another solid increase in business activity across the UK construction sector, although the rate of expansion slipped to its lowest since September. 

On a more positive note, the number of construction firms reporting supplier delays dropped from 47% in November to 34% in December. Fewer supply shortages contributed to the slowest rate of input price inflation for nine months.

The survey’s Total Activity Index posted 54.3 in December, remaining above the 50.0 no-change threshold. However, this was down from 55.5 in November and signalled the weakest rate of expansion for three months. 

Some survey respondents noted that tighter pandemic restrictions and rising Covid-19 cases had acted as a brake on recovery, especially in the commercial sector. Residential construction activity saw the strongest growth (index at 55.3).

Customer demand was relatively resilient in December and the latest rise in overall new order volumes was the strongest since August. Higher levels of new work have now been recorded for 19 consecutive months.

Looking ahead, just over half of the survey panel (51%) forecast a rise in business activity during 2022, while only 9% predict a decline. However, the degree of optimism was the joint-lowest reported since January 2021. 

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