UK builders' orders at six-year high as property boom rides out lockdowns
UK construction firms saw growth in trade accelerate in November, with new orders at their highest since 2014 and output rising for a sixth month in a row.
A leading business survey showed a rising proportion of building companies reporting higher trade compared to October. Firms said Britain’s housing market boom and rising client confidence in civil engineering boosted the ongoing rebound from the collapse in activity seen earlier this year.
Only 16% of firms expect declining trade over the year ahead, according to new purchasing managers’ index (PMI) data on Friday.
"The energy behind this success was primarily the housing sector as sales remained buoyed by consumers rushing to meet the stamp duty relief deadline less than four months away and a rise in home improvement projects for locked down citizens,” said Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS), which co-compiles the survey.
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It comes in spite of England's lockdown throughout November, with similar measures in Wales, Northern Ireland and parts of Scotland for some of the month. English building sites were able to remain open, while estate agents also remained open and property viewings and surveys continued.
The headline PMI figure for construction firms rose to 54.7 in November, on an index where readings above 50 show most firms expanding and below 50 show decline. It had come in at 53.1 in October. Housebuilding saw the most widespread growth in trade.
Firms said they were now moving from catch-up work to new projects, with clients releasing budgets held back earlier in the pandemic. But demand left supply chains overstretched, sparking the biggest rise in purchasing costs since April 2019.
Employment also continued to fall as firms still looked to cut costs. Commercial work saw its slowest growth in six months, with demand subdued for office, retail and other corporate projects.
It comes after similar data for the UK services sector this week showed a reading of 47.6, with most firms facing declining trade under the impact of coronavirus curbs.
Yet the services fall marked a less severe decline than in October, than earlier estimates had suggested and than the UK lockdown earlier this year, despite the impact of restrictions.
READ MORE: EU stockpiles UK factory goods as firms brace for Brexit disruption
Meanwhile factories saw growth accelerate last month, boosted by ‘Brexit buying’ as EU firms stockpiled amid fears of disruption after the transition period ends on 31 December.
Production neared a three-year high in November. The headline figure for manufacturing came in at 55.6, up from 53.7 in October.
Official figures suggest Britain’s GDP will contract
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