UK construction sees a rise in business activity

The latest Markit/CIPS purchasing managers' index (PMI) shows that construction output rose in October, driven by housing activity.

According to the report, UK construction companies recorded a sustained expansion of overall business activity in October, largely thanks to another big increase in residential work. The PMI moved up to 52.6 from 52.3 in September.

While construction rose, there was also a stabilisation in commercial construction activity during October and civil engineering, the weakest performing broad category of activity, decreased slightly.

There was moderate growth in new business in October, but the increase was much weaker than in the first quarter of the year. Some firms felt that Brexit-related uncertainty had continued to impact on client confidence and cause delays in spending decisions.

“A rise in input prices due to the weak pound resulted in the second-fastest increase in cost pressures since mid-2011.

Commenting on the results, David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said: “Respondents reported a squeeze on margins, while increased marketing and new projects helped counteract the continuing uncertainty surrounding the Brexit aftermath. Coupled with concerns around the longer-term performance of the UK economy, this dampened overall business optimism to its second-lowest level since May 2013.”

At Beavis Morgan, we work with a number of construction businesses, helping them with strategic planning, business turnaround and improving business performance for the future. For further information about how we can help you and your business, contact Steve Govey or your usual Beavis Morgan Partner.