Homebuilding drives construction recovery

The end of Q3 signalled an increase in construction activity, following the sharpest rise in new business since before the pandemic-induced lockdown, with firms increasing their purchasing activity at the quickest pace for nearly five years, according to the latest IHS Markit/CIPS UK Construction Total Activity Index, which registered 56.8 in September, up from 54.6 in August.

Meanwhile, employment continued to fall, but the rate of job shedding eased, and sentiment towards future activity was the strongest for seven months.

The strongest performing category was home building, where firms registered a sharp expansion in activity for the fourth month running. Work undertaken on commercial projects also rose strongly, increasing at quickest pace for over two years. Meanwhile, civil engineering activity fell for the second month running and at the sharpest rate since May.

Anecdotal evidence suggested that the expansion in overall activity was predominantly driven by an improvement in demand conditions during September.

New orders rose for the fourth time in as many months, with panellists continuing to mention a release of pent-up demand. In fact, the latest increase was the strongest since just before the escalation of the Covid-19 pandemic.

Brian Berry, chief executive of the Federation of Master Builders, said: “Growing activity in the construction industry should make this an attractive sector for young people considering their next steps after school, and people leaving other industries looking to retrain. Construction has a key role to play in rebuilding the economy as recognised by the Prime Minister in his ‘Build, build, build’ speech earlier this year.

“However, to ensure high standards, the industry needs to train, train, train. This means the trades need to be prioritised in the government’s funding allocations for colleges. It also means we need to strengthen colleges’ links with employers so that we join the dots.”