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Construction industry grew in September

Construction industry grew in September

The UK’s construction industry grew substantially in September, according to the latest Markit/Chartered Institute of Procurement and Supply (CIPS) UK Construction Purchasing Managers Index (PMI).The rate of growth was at its highest level for six months, and the overall figure itself rose from 57.3 to 59.9 (any figure above 50 represents growth). Growth surpassed expectations, with many economists predicting the figure would be 57.5.David Noble, group chief executive officer at CIPS, said: “The  building blocks were firmly in place this month as the sector reported more work, rising staff levels, and strong optimism for the future.“Though the overall growth rate of new business was showing signs of slowing down, all three sectors offered positive news with residential housing the strongest performer.”In fact, productivity in residential housing reached its highest level for 12 months.There are concerns that the wider UK economy has slowed down somewhat in the third quarter of 2015, but these do not appear to have impacted on the construction industry. In fact, 52 per cent of those asked said they expected business to grow over the next year, compared to just six per cent who thought it would decrease.The biggest hinderance to further growth appeared to be the ongoing impact of an industry-wide skills shortage. While overall staffing levels were up (job creation has reached a three-month high), many companies said they were still struggling to recruit enough skilled specialists, and were still having to rely on subcontractors to plug any gaps.However, this was partly offset by the global price of oil remaining low, which kept down the cost of fuel and materials throughout the month, as has now been the case for some time.A slowdown in the growth of new business (now at its second-lowest rate since 2013) suggested that this stellar performance is not necessarily assured for the coming months, but there are certainly strong foundations that could help to sustain growth if underlying issues are addressed. 

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