Strong UK construction recovery continues in September

Activity in the UK construction sector picked up speed in September, helped by a post-lockdown bounce in the housing market, according to new PMI (Purchasing Managers' Index) data from IHS Markit and CIPS (the Chartered Institute of Procurement and Supply).
Quarry Products / October 9, 2020
By Liam McLoughlin
PMI data signalled another sharp increase in UK construction activity at the end of the third quarter. Source: IHS Markit/CIPS
PMI data signalled another sharp increase in UK construction activity at the end of the third quarter. Source: IHS Markit/CIPS

The PMI figures show that activity in the construction and trade sectors accelerated to 56.8 points in September from 54.6 in August - above the 50-point measure that separates expansion from contraction in the construction sector.

The figures represent good news for aggregates and other building materials suppliers.

The expansion came amid the sharpest rise in new business since before pandemic-induced lockdown, with firms increasing their purchasing activity at the quickest pace for nearly five years. Meanwhile, employment continued to fall, but the rate of job shedding eased. Looking  forward, the PMI data shows that sentiment towards future activity was the strongest for seven months.

Underlying data revealed varied results across the three monitored sub-sectors. 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.

Ben Dyer, CEO of the Powered Now mobile billing service for tradespeople, said: "The jump in UK Construction PMI in September is incredibly encouraging news for the construction market.

He added that whole industry is still in catch up mode and there will be fluctuations in this recovery, as seen by a slowdown in August. "However, we are still seeing an upward trajectory of growth as UK construction, at least in the new build, renovation and maintenance space [which] is operating close to capacity," said Dyer.