Construction sector growth slows as new restrictions hold back recovery

Growth in the UK’s construction sector continued in December but slowed to its lowest since September as some firms said rising Covid-19 cases and new restrictions “held back” the sector’s recovery.

The closely followed IHS Markit/CIPS UK Construction purchasing managers’ index hit a reading 54.3 for last month, down from 55.5 in November.

Any reading above 50 is seen as growth.

A consensus of analysts had forecast a reading of 54 for the month.

The slowdown came as the Government launched new Plan B restrictions telling people to work from home where possible following a surge in coronavirus cases driven by the spread of the Omicron variant.

Tim Moore, director at IHS Markit, said: “UK construction companies ended last year on a slightly weaker footing as renewed pandemic restrictions held back the recovery, especially in commercial work and civil engineering.

“Some firms commented on disruption from rising Covid-19 cases, while others noted a lack of new work to sustain the rapid growth rates seen earlier in 2021.”

The figures revealed that civil engineering firms reported a slight decline in work for the month, with a 49.1 reading ending a nine-month period of growth.

Meanwhile, the commercial building sector also saw growth slow as it reported its weakest figures for three months.

However, residential construction firms saw momentum improve over the months.

There was also some cause for optimism among companies which reported a decline in supplier delays, with 34% of firms reporting delays compared with 47% in the previous months.

New order volumes were also their strongest since August and helped to boost employment numbers for the month.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS), said: “Though the overall index moved down slightly in December there was light at the end of the tunnel for builders in terms of the strongest order numbers since August, reduced pressure on business costs and some improved delivery times for essential materials.

“Residential building has powered on every month since June 2020 and was the best performing category in the last month of 2021.

“Commercial building struggled to gain a stronger footing in a weakened UK economy and civil engineering activity fell back into contraction.”