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UK construction falls for the first time in eight months

By - World Infrastructure Journal

UK construction falls for the first time in eight months

The latest UK Construction Total Activity Index has signalled a decline in overall construction output for the first time since May 2020, falling 5.4 points between December and January.

The Index, released by IHS Markit/CIPS, revealed that new order growth fell to its weakest since June 2020, due to falls in commerical and civil engineering which the growth in housing construction failed to offset.

Construction companies have continued to experience intense cost pressures, driven by rising prices for plaster, steel and timber. Input price inflation has accelerated dramatically recently, reaching its highest rate in over two-and-a-half years.

Tim Moore, Economics Director at IHS Markit, commented “the construction sector ended a seven-month run of expansion in January as a renewed slide in commercial work dragged down overall output volumes. ”

Mr Moore was able to help give the bigger picture facing manufacturing in the UK, explaining that “house building was the only major construction segment to register growth, but momentum slowed considerably in comparison to the second half of last year. ”

Brexit and Covid-19 have continued to pose a problem to construction companies. There are still reports of major delays with receiving imported products and materials from suppliers, with Mr Moore clarifying that this has been a problem“with congestion at UK ports contributing to the sharpest lengthening of delivery times since May 2020. ”

There was some hope for construction companies when output rebounded quickly after stoppages on site at the start of Covid-19. Mr Moore highlighted, however, that there has been some  “hesitancy among clients in January and worries about near-term economic conditions resulted in a dip in growth expectations for the first time in six months. ”


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