UK construction recovers as supply chain pressures ease

Reuters

Published Dec 06, 2021 09:39

Updated Dec 06, 2021 11:06

LONDON (Reuters) -Growth in Britain's construction industry hit a four-month high in November, as supply-chain difficulties appeared to have passed their peak and a rise in commercial property work offset a slowdown in house-building, a survey showed on Monday.

The monthly purchasing managers' data also showed an easing in inflation pressures to their lowest since April - although they are still high in outright terms.

The survey largely predates the emergence of the Omicron variant of COVID-19, and the signs of an easing in inflation may encourage the Bank of England to wait rather than raise interest rates this month, as had been widely expected.

The IHS Markit/CIPS UK Construction Purchasing Managers' Index (PMI) rose to 55.5 last month from 54.6 in October, and IHS Markit said the worst of supply chain shortages appeared to have passed for the sector.

Just under half of construction companies reported longer delivery times, compared with more than three quarters in June.

"Port delays and a severe lack of transport availability due to haulage driver shortages continued to hold back supplier performance, although firms noted an improvement in the availability of specific items, especially timber," IHS Markit said.

Some 72% of firms reported increased costs for building supplies - compared with just 3% who saw a fall - but this still represented the lowest inflation pressure since April.

The all-sector PMI - a combined reading of November's manufacturing, services and construction surveys - edged down to 57.4 from October's 57.5, which was the highest since July.