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Construction activity in the UK ahead of market expectations

Jake Carter

March 4, 2021

build

Construction activity in the UK rose in February and scored higher in the latest UK’s Construction PMI than the market expected.

The index shows that construction scored 53.2 in February, with any score above the 50-mark indicating growth.

This is ahead of market expectations, which predicted a score of 51.

New order volumes were up for the ninth straight month in February, according to the data.

Residential work remained the strongest area of growth in February, however it was down on the January figure.

This slowdown in house building was offset by the greatest rise in commercial work since September 2020, as well as a slower fall in civil engineering activity.

Gareth Belsham, director of Naismiths, said: “January’s wobble is starting to look like little more than a New Year’s Day hangover.

“The construction industry clicked straight back into gear in February, posting a solid jump in output. More exciting still, the pace of new orders accelerated even further.

“New order numbers have now increased for nine months in a row, buoyed by rising investor confidence.

“With construction firms steadily starting to recruit again, the industry is clearly responding to the Prime Minister’s call for Britain to ‘build, build, build’ its way back to economic growth.

“There are a few wrinkles in the data but little to worry busy builders.

“The pace of housebuilding eased off a touch, but residential is still the strongest sub-sector in the construction industry.

“And after months of fragility, commercial sector building is finally picking up steam too.

“The flipside of all this is a surge in materials prices. With demand exceeding supply and transport costs nudging up as oil prices rise, cost pressures are starting to build sharply.

“The Chancellor’s ‘steady as she goes’ Budget struck the right tone with a construction industry which is feeling increasingly upbeat about its future.

“Optimism is now at its highest level since October 2015, and while there is nothing inevitable about the momentum, it is real and improving.”


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