UK construction order growth at six-year high - PMI
UK construction order books rose at the fastest pace for more than six years in November as more houses were built, a survey showed.
The IHS Markit/CIPS purchasing managers' index rose to 54.7 from 53.1 in October with a score of 50 indicating no change. November's reading beat the average analysts' estimate of 52.
Housebuilding was the strongest part of the industry in November with a reading of 59.2. Civil engineering returned to growth with a score of 52.3 and commercial work had its lowest score for six months at 51.9.
New business grew at its fastest pace since October 2014, reflecting a revival in tender opportunities and increased confidence, IHS Markit said. Purchasing growth also rose to a six-year high.
Tim Moore, IHS Markit's economics director, said: "UK construction output stayed on a recovery path in November and there were signs that the main growth driver has transitioned from catch-up work to new projects. Construction firms report[ed] a boost from rising client confidence and the release of budgets that had been held back earlier in the pandemic."
Rising demand placed strain on supply chains with respondents reporting transport delays and shortages of stock. Prices of timber and other material rose sharply.
Some businesses reported job cuts despite the increase in demand but the overall fall in headcount for the industry was the lowest since before Covid-19 hit the UK.
Samuel Tombs, a UK specialist at Pantheon Macroeconomics, said continuing job cuts "suggest that construction firms are not preparing for a swift return to pre-Covid levels of activity".
Tombs added: "The recent rise in mortgage rates casts a cloud over the outlook for housebuilding beyond the next couple of months, as highly leveraged first-time buyers disproportionately buy new-build properties. Working-from-home likely will be more commonplace after Covid-19 has been brought under control than it was last year, undermining demand for office space. Accordingly, we doubt that construction output will match its pre-Covid peak until 2022."