November 29, 2022

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UK June construction PMI 66.3 vs 64.2 prior

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Latest data released by Markit/CIPS – 6 July 2021

Of note, construction output growth hits a 24-year high in June with the recovery led by house building and commercial work. Overall construction activity climbed by its quickest pace since June 1997 with new orders also rising sharply.

That said, input price inflation is observed to be the highest in the survey’s history and supply disruptions may pose a problem moving forward. Markit notes that:

“June data signalled another rapid increase in UK
construction output as housing, commercial and civil
engineering activity all expanded at a brisk pace. The
headline index signalled the fastest rise in business activity
across the construction sector for 24 years. Total new orders
expanded at one of the strongest rates since the summer
of 2007, mostly reflecting robust demand for residential
projects and a boost to commercial work from the reopening
UK economy.

“Supply chains once again struggled to keep up with
demand for construction products and materials, with lead
times lengthening to the greatest extent since the survey
began in April 1997. Survey respondents widely reported
delays due to low stocks of building materials, shortages
of transport capacity and long wait times for items sourced
from abroad.

“Purchasing prices and sub-contractor charges both
increased at a survey-record pace in June, fuelled by supply
shortages across the construction sector. Escalating cost
pressures and concerns about labour availability appear
to have constrained business optimism at some building
firms. The degree of positive sentiment towards the yearahead growth outlook remained high, but eased to its
lowest since the start of 2021.” 

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