Construction industry recovers from eight month low
The UK’s construction industry confounded market expectations as growth picked up following an eight-month low on the IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI).
The sector has been struggling amid global supply chain issues and labour shortages, while demand for building projects has also decreased.
The index rose to 54.6 in October from 52.6 in September, contrasting positively with expectations of a further decline to 52.0.
The primary factor behind the resurgence was fading supply-side disruption rather than increased construction demand.
The proportion of construction companies reporting delays from suppliers dropped to 54 per cent from 63 per cent, and growth quickened across the housing, commercial and civil engineering sectors.
The suppliers’ delivery times index rose to 23.3 in October—its highest level since April—from 19.2 in September, indicating that fewer builders are experiencing delays in receiving raw materials.
By contrast, the new orders index remains dormant at 53.2 in October.
Laith Khalaf, investment analyst at AJ Bell believed the latest results were encouraging for the industry.
He said: “What’s particularly pleasing is that while prevalent, some supply bottlenecks appear to be easing, which hopefully signals a return to business as usual in the not too distant future.”