Across
a variety of surveys and research conducted by various organisations towards
the end of the summer, the data continued to point to a renewed slowdown in
output growth across the UK construction sector.
All
the main sectors, including those given a high priority by Government such as
housebuilding and infrastructure, recorded losses of momentum.
And
although each of the surveys painted optimistic pictures of future growth
opportunities, they also acknowledged there were no certainties that this would
happen and given the current political and economic climate few are confident
that an upturn will happen any time soon.
Several
surveys pointed to an issue that will have a profound impact on the industry as
a whole for the remainder of 2018 and into 2019 – the spiralling costs of
materials and stretched supply chain capacity.
The
latest IHS Markit/CIPS Construction PMI Index showed that there had been a:
- Modest
overall rise in construction activity
- Suppliers’
delivery times lengthen to greatest extent since March 2015
- At
52.9 in August, the seasonally adjusted HIS Markit/CIPS UK Construction
Purchasing Managers’ Index® (PMI) eased from July’s 14-month peak of 55.8,
but remained above the crucial 50.0 no-change mark.
As
Tim Moore, Associate Director at IHS Markit and author of the report said of
the latest survey: “The degree of optimism reported in August remained
constrained by external factors, including domestic political uncertainty,
stretched supply chains and shortages of suitably skilled labour.”
Mark Robinson, Scape Group Chief Executive, commented
that as the construction sector remained
resilient in August, it was particularly pleasing to see the companies remain
optimistic that business activity will continue to expand over the next year,
despite the Brexit clamour.
“Infrastructure investment remains absolutely vital," he
added. "Successfully delivering Crossrail and HS2 is important for the
long-term economic health of the country, but there are also many hundreds of
smaller projects which could have a big impact on regional economies right now
that the Government and Local Enterprise Partnerships (LEPs) can press ahead
with to boost growth across the UK.
“The next couple of months may be fraught with uncertainty
around Brexit, but we must not forget that the UK still needs to keep building
to provide new schools, homes, health centres, libraries, and other community
services which meet the needs of our rapidly increasing population. The
Government can help to alleviate the impact of Brexit on the construction
sector and the economy by ensuring a strong pipeline of investment in these
projects.”
