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UK construction growth hits three-month low in December

Growth in the UK construction sector hit a three-month low in December amid disruption from the Omicron variant, according to a survey released on Friday.
The IHS/Markit CIPS construction purchasing mangers’ index fell to 54.3 from 55.5 in November, but remained above the 50.0 mark that separates contraction from expansion. Some survey respondents said tighter pandemic restrictions and rising Covid cases had acted as a brake on recovery, especially in the commercial sector.

The survey found that residential construction activity saw the strongest growth, with the index at 55.3, and was the only category to gain momentum in December. Commercial building lost its position as the best-performing segment, with the index at 53.6, while civil engineering activity fell slightly at the end of 2021, with the index at 49.1 following nine months of expansion.

Tim Moore, director at IHS Markit, said: “UK construction companies ended last year on a slightly weaker footing as renewed pandemic restrictions held back the recovery, especially in commercial work and civil engineering. Some firms commented on disruption from rising Covid-19 cases, while others noted a lack of new work to sustain the rapid growth rates seen earlier in 2021.

“The worst phase of supplier delays seems to have passed as the availability of construction products and materials continued to turn a corner in December. While suppliers to the construction sector have caught up on backlogged work and boosted capacity, there were still widespread reports citing unresolved transportation issues and driver shortages.

“Input cost inflation moved down another notch in December, helped by the alleviation of some supply chain pressures. The latest rise in purchasing prices was far slower than the 24-year peak seen last June.”

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