Civil engineering drives construction growth in April

Markit CIPS May 2017An increase in civil engineering and residential building activity has fuelled the biggest monthly output rise of the year so far in the UK construction sector, new figures have shown.

The latest Markit/CIPS UK Construction Purchasing Managers’ Index rose to 53.1 in April from 52.2 in March.

Civil engineering work enjoyed its sharpest increase since March 2016 while the acceleration of residential jobs also reached a four-month high.

The number of new jobs created also hit its strongest level since May 2016.

Respondents to the monthly survey of construction purchasing managers have linked the growth to the resilient economic backdrop and a sustained improvement in client demand.

Meanwhile, robust demand for construction materials and upward pressure on costs from sterling depreciation resulted in another steep increase in input prices during April.

Tim Moore, senior economist at IHS Markit and author of the Markit/CIPS Construction PMI, said: “April’s survey reveals a positive start to the second quarter of 2017, with a robust upturn in civil engineering activity helping to boost the construction industry. There were also more encouraging signs from the house-building sector, as growth recovered to its strongest so far this year. However, the performance of the commercial building sector remained subdued in the context of the past four years.

“UK construction companies noted that the resilient economic backdrop helped to drive up client spending in April. Greater workloads led to the fastest pace of job creation since May 2016 and a continued squeeze on subcontractor availability.

“Supply chain pressures also intensified, as highlighted by the largest lengthening of delivery times for almost two years. A sharp rate of input cost inflation persisted in April, reflecting an ongoing pass through of higher commodity prices, imported goods and energy costs. However, the recent recovery in sterling may have started to help limit some cost pressures in April, as the overall rate of input price inflation moderated to a six-month low.”

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