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UK construction activity picks up in February

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World Cement,

UK construction activity increased in February but remained under the level seen in December last year, according to the latest Markit/CIPS UK Construction Purchasing Managers’ Index (PMI).

“February’s survey date highlights that the UK construction sector has rebounded from its post-referendum soft patch but remains on a relatively slow growth trajectory,” said Tim Moore, Senior Economist at HIS Markit. “Weaker momentum in the house building sector was a key factor weighing on construction growth, alongside a renewed fall in work commercial projects.”

With residential activity slowing and commercial building declining for the first time since October 2016, civil engineering was the main driver of growth in the sector.

“Housing was singled out as a drag, with its weakest performance for six months,” added Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement and Supply (CIPS). “As a previous driver of growth, there will be concerns about this softening of house building activity.”

Input costs also continued to rise on the back of the weak sterling against the US dollar and euro. Construction companies reported the second-fastest rise in input costs since August 2008, which some reported to be having a “disrupting impact on contract negotiations,” said Moore.

“It is the relentless and brutal rise in prices for construction materials, combined with the impact of the weaker pound, that could block the sector’s progress in the coming months,” said Brock.

More positively, the sector reported a solid expansion in employment numbers, while sub-contractor demand also picked up, leading to the biggest fall in sub-contractor availability since January 2016.

“Overall, the sector’s optimism was still high as workloads remained strong, propped up by the prospect of new projects and repeat business,” Brock concluded.

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