Source: The Telegraph
Britain’s builders are getting back to work as housebuilders try to meet demand for new homes and large civil engineering projects get under way, following a modest slowdown at the start of the year.
Last month growth accelerated in the construction sector, encouraging companies to hire more staff to meet the rising demand.
Overall construction output grew at its fastest pace so far this year, according to the purchasing managers’ index from IHS Markit.
The current level of growth is still relatively modest, however – in January 2014 the PMI reached 64.6.
“The housing sector offered up the best news recovering from last month’s minor blip and building on its strongest performance since the end of last year,” said Duncan Brock of the Chartered Institute of Procurement and Supply.
“Employment growth rose to its highest since May 2016, though continued disquiet about the lack of highly skilled labour availability persisted, and must be addressed if the future strength of the sector is to be assured.”
Building firms rely heavily on imported materials, which are becoming more expensive due to the fall in the pound. The price pressures eased a touch in April but remain uncomfortably high.
Those inflation pressures are also limiting households’ spending power, which could hit the market. As a result, the industry may rely on the Government to fund its growth.
“Construction companies will be hoping that recent Government measures aimed at boosting infrastructure and housebuilding (including in last November’s Autumn Statement) have a material beneficial impact,” said Howard Archer, chief UK and European economist at IHS Markit.
“Measures announced include £2.3bn being earmarked for a new Housing Infrastructure Fund, which will be used to support the infrastructure needed to support the building of up to 100,000 new homes.”