As we reach the latter stages of arguably the most turbulent year in living memory, construction industry leaders have cautiously welcomed the quickest rise in new business since lockdown. However, fears linger that construction is currently in the ‘calm before the storm’ with a challenging winter and further potential lockdowns ahead.
Warnings have also been raised that increased housebuilding should not come at the expense of the UK failing to meet its 2050 net zero target, as the latest monthly PMI data for September signalled another sharp increase in UK construction activity at the end of the third quarter.
Meanwhile, employment continued to fall, but the rate of job shedding eased. Looking forward, business optimism for the next 12 months was the strongest since February, with expectations of a sustained rise in new work.
The strongest performing category was home building, where firms registered a sharp expansion in activity for the fourth month running. Work undertaken on commercial projects also rose strongly, increasing at quickest pace for over two years. Meanwhile, civil engineering activity fell for the second month running and at the sharpest rate since May.
New orders rose for the fourth time in as many months, with panellists continuing to mention a release of pent-up demand. In line with the rise in new work, UK construction firms recorded another marked increase in purchasing activity at the end of third quarter, with the rate of growth accelerating to its fastest since October 2015.
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “UK construction took off in September, soaring ahead of both the manufacturing and service sectors in terms of output growth and recording the fastest rise in purchasing activity since October 2015. However, civil engineering took another backwards step and progress worsened significantly as bigger construction developments stayed in suspended animation. Government support schemes are winding down, so the bigger worry remains levels of job creation. With another drop in employment numbers, vacancies were sparse and further redundancy schemes could be on the cards once this pent-up demand for work is satisfied.”
September PMI data was collected between 11-29 September 2020.
SAEMA – Specialist Access Equipment Maintenance Association – is the national trade body for the permanent and temporary façade access equipment industry. We have observed the developments within the UK’s construction and FM sectors with great interest since the coronavirus pandemic took hold.
This latest report on a rise in new business is extremely encouraging and it is hoped that it will continue, minimising the number of workers that are laid off as a result of the slow-down.