Construction sector recovery picks up pace as supply delays ease

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Growth in the UK’s construction sector picked up pace in November to reach the fastest in four months as supply delays continue to ease, according to new figures.

The closely followed IHS Markit CIPS UK Construction purchasing managers’ index hit a reading of 55.5 for November, up from 54.6 in October.

Any reading above 50 is seen as growth.

The figures were driven by a steeper rise in commercial construction, which offset a slight slowdown in housebuilding growth.

The reading was ahead of the expectations of analysts, with a consensus compiled by Pantheon Macroeconomics predicting a reading of 54.

Tim Moore director at IHS Markit, said: “November data highlighted a welcome combination of faster output growth and softer price inflation across the UK construction sector.

“Commercial building led the way as recovering economic conditions ushered in new projects, which helped compensate for the recent slowdown in house building.

“Major infrastructure work also boosted construction activity in November, as signalled by the fastest growth in the civil engineering category since August.”

The report also showed optimism around businesses as supplier delivery times dipped, highlighting an easing of supply disruption which has weighed on the industry in recent months.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS), said: “Adding to this positivity was signs of recovery in supply chain performance with just 47% of construction firms reporting longer waiting times, which is the smallest number for eight months.

“Even with this glimmer of hope that the pressure on deliveries was easing, purchasing remained at higher level to counteract disruptions from ongoing driver shortages and port delays as supply chain managers bought more than their immediate need.”

November’s data also pointed to “another robust rise” in demand for construction products and materials, the report added.

It said that 72% of surveyed firms highlighted an increase in purchase prices as a result.