Achi news desk-
Housebuilding and commercial construction were both virtually unchanged last month. The stabilization in residential work was the best performance in more than a year for housebuilders who have struggled during a market downturn fueled by higher interest rates and the cost of living crisis.
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The headline reading for activity across all subsectors increased from 49.7 in February to 50.2 in March, the highest since August 2023. Any reading above 50.0 indicates a general expansion in output.
“The near-term outlook for construction workloads appears increasingly favorable as order books improved again in March and to the largest extent for just under a year,” said S&P’s director of economics, Tim Moore.
“Overall, construction companies commented on a broad rebound in tender opportunities, helped by easing borrowing costs and signs that UK economic conditions have started to recover in the first quarter of 2024.”
There was a slight increase in the new work received by construction companies. The rate of expansion accelerated since February and was the strongest for 10 months.
Almost half of those surveyed predict an increase in output levels in the next 12 months, while only 11% predict a decrease. However, this was a decline from February when 51% said they expected a rise and only 6% predicted a decline.
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Purchasing costs rose for the third consecutive month but the inflation rate was marginal and the weakest during that period. March also saw another reduction in the number of staff but again the rate of job loss was only marginal, and less than in February.
Kelly Boorman, national head of construction at RSM UK, said it was encouraging to see housing activity at its highest level since November 2022. However, there could still be some problems on the horizon.
“Although the number of available subcontractors rose to 57.2 last month, and insolvencies are predicted to increase significantly in the coming months and an increase in activity across the commercial and housing sectors, this could create a perfect storm for shortages in the supply chain,” he warned.
