Construction National

Magazine, Online Directory and Web Design Service

Thu21062018

Last updateWed, 20 Jun 2018 11am

The state of the British construction industry in 2018

imgA turbulent start to the year masked the true potential of the British construction industry in 2018's first few months, as a prolonged winter ended with the disruption of the 'Beast from the East' weather system. Valve and Actuator manufacturer Actuated Valve Supplies discussed further.

This brought strong winds and heavy rain for much of March, and was followed by the less severe 'Beaster' weekend, as further weather warnings were issued in the run-up to Easter.

With all of this making construction work difficult to keep on schedule, the figures posted in the first few months' industry surveys were not as positive as they might have been - but activity is now beginning to return to the British construction sector.

The latest IHS Markit/CIPS UK Construction PMI report, published in early May, shows a return to positive growth for the industry in April 2018 - the first monthly growth in new business of the year so far, and a sure sign that the better weather conditions of recent weeks are emerging in the data after a challenging winter.

More hidden growth still to come

Importantly, despite the positive growth in April, it is likely that UK construction activity levels still have more increases to post in the upcoming reports.

This is because, although construction work itself is somewhat back on track following the improved weather conditions, the ongoing effects of the Beast from the East mean there are still some shortages of raw materials in some areas.

As a result, the April growth was perhaps not quite as high as it might have been, and we could still see even greater gains in the coming months as the industry surveys continue to reflect the correction back to true market conditions.

Duncan Brock, group director at CIPS, explained: "The effects of the previous month's bad weather were echoed in April as supply chains stayed under the cosh again.

"Besieged by raw material stock shortages and capacity difficulties, suppliers tried to catch up on their delivery commitments with limited success. Transportation times were still lengthy for construction materials for projects already in the pipeline."

New housing leads the way

With conditions now generally better than they were in the winter and early spring, the figures are starting to reflect this, as the positive growth in new business overall indicates.

But it is new house building that is really leading the way at present, showing "robust growth" in April and an increase in new residential construction work at its highest for a year.

Many of the PMI survey respondents commented on this, while citing disruption caused by snowfall in March as having hampered their previous performance; improvements in the weather have also boosted output in other areas, including civil engineering and commercial building projects.

Overall the PMI stood at 52.5 in April, compared with 47.0 in the previous month. It is now at its highest since November, and at a level broadly in line with performance throughout 2010-13.

Mr Brock added: "House building at least seems to be moving in the right direction and, by achieving its fastest rate of growth since May 2017, it has gone from a laggard to a construction leader again."