UK construction output rose at the fastest pace for more than six years in March as a revival in confidence spread across the sector.
The IHS Markit/CIPS UK construction purchasing managers’ index registered 61.7 in March – a sharp rise from 53.3 in February and the strongest growth rate since September 2014. Growth was spread across all major sections of the industry.
Housebuilding remained the strongest category and commercial construction and civil engineering had their best scores since the second half of 2014. Job creation accelerated to a 27-month high.
Respondents commented on delayed projects being restarted, especially in hospitality, leisure and office development. Infrastructure projects and rising new home sales also boosted activity.
New orders also increased sharply and confidence about the coming year was strong. Growth expectations were the most upbeat since June 2015, reflecting confidence in the economic picture, hopes for the easing of the pandemic and pent-up demand.
Tim Moore, IHS Markit’s economics director, said: “March data revealed a surge in UK construction output as the recovery broadened. Improving confidence among clients in the commercial segment was a key driver of growth, with development activity rebounding in sectors of the economy set to benefit the most from the improving pandemic situation. The increasingly optimistic UK economic outlook has created a halo effect on construction demand and the perceived viability of new projects.”
Higher demand for construction products and materials caused longer waiting times for deliveries by suppliers. A shortage of supply to meet growing demand caused the steepest increase in purchasing prices since August 2008. Suppliers blamed Covid-19 and Brexit for price rises.