Civil engineering drives construction growth in February

The UK construction industry recorded sustained growth in February according to the latest Markit/CIPS UK Construction PMI figures.

The construction PMI reading for February was 52.5, up slightly on January’s 52.2 and above the growth threshold of 50.0.

January saw the industry suffer a slight dip as it recorded the weakest rise since September 2016.

The main driver of growth in February was civil engineering, taking the place of housebuilding as the strongest performing sector.

Residential building grew at its slowest pace for six months, while commercial building activity dropped for the first time since last October.

There was good news for the construction industry in terms of employment levels, which continued to increase despite new business growth being at its lowest level for four months.

Respondents to the survey cited the resilient economic backdrop and a returning client confidence since last June’s Brexit vote as key factors in February’s growth.

The weaker sterling rate continued to put pressure on the industry in terms of price hikes for imported materials, with reports that the higher costs causing delays on decision making.

Firms also reported the second-fastest rise in input costs since August 2008.

Optimism within the industry for the coming 12 months, however, remains strong, with 48% predicating an increase in business and only 13% expecting to see a downturn.

A major reason behind the industry’s positivity was the continued strong demand for new housing, boosted by the government’s housing white paper.

Tim Moore, Senior Economist at IHS Markit said: “February’s survey data highlights that the UK construction sector has rebounded from its post-referendum soft patch but remains on a relatively slow growth trajectory.

“Weaker momentum in the house building sector was a key factor weighing on construction growth, alongside a renewed fall in work commercial projects.”

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