Construction buyers have reported a sudden growth spurt in February after two months of decline raising hopes the worst of the economy’s storms have passed.
The reported surge was the strongest since May 2022, supported by a big rebound in commercial work and steady growth in civil engineering activity.
This more than offset the decline in housing activity, which fell for the third month running.
Confidence for the year ahead was also lifted by the lowest supplier delays for two years and a welcome slowdown in input cost inflation.
The latest bellwether S&P Global/CIPS UK Construction Purchasing Managers’ Index spiked to 54.6 in February from 48.4 in January.
Buyers said they had seen an improvement in order books for the first time since last November.
Dr John Glen, Chief Economist at the Chartered Institute of Procurement & Supply, said: “The overall figure paints a bright picture of progress in the construction sector with a robust jump in output last month.
“Supply deliveries were at their most improved since January 2020 and some commentators mentioned sourcing closer to home to avoid logjams in supply chains caused by China’s Covid policy and the war in Ukraine.
He added: “Builders themselves remained cheerful as optimism rose sharply and almost half of the survey’s respondents believed business would improve in 2023.
“With the slowest inflationary rises for raw materials since November 2020 this offered some relief, and it was cheaper transportation costs that helped offset salary and energy costs which were still rising.”
Tim Moore, Economics Director at S&P Global Market Intelligence, which compiles the survey said: “Some firms noted that fading recession fears and an improving global economic outlook had boosted client confidence in the commercial segment.
“Construction companies appear increasingly confident about the year ahead business outlook, with optimism rebounding strongly from the lows seen in the final quarter of 2022.”
Article written by Aaron Morby for www.constructionenquirer.com
