Activity Levels in UK Construction Increased in September

Activity Levels in UK Construction Increased in September

26th October 2020

The latest numbers show that the UK construction industry enjoyed a sharp rise in activity during September. While there is still a long way to go, the lower rate of job losses and improved output helped to make it the most positive month since the current crisis began.

The Full Details

These figures come from the Purchasing Managers Index (PMI) that is put together each month by IHS Markit. In September, they noted the steepest rise in the construction industry since the introduction of the coronavirus lockdown earlier in the year.

In fact, the rate of purchasing activity has risen faster than has been the case for almost five years. The index showing activity in this sector registered 56.8 for September, which compares to 54.6 in the previous month. It should be remembered that any number over 50 indicates growth.

Among the different parts of the construction business, it was home building that performed best of all. This area grew for the fourth consecutive month. Positive news could also be seen on commercial projects, which grew faster than has been seen in more than two years.

One area with a drop was civil engineering activity, which has now fallen for two months in a row. This sector fell more dramatically than it had done since May.

More Figures

More good news came with another rise in new orders, which have now been on an upward trend for four months in a row. Analysts suggest that we are still seeing the effect of the demand that built up during the period of stricter restrictions earlier in the year.

Looking ahead, Eliot Kerr, who is an economist at IHS Markit, suggested that the signs currently point to a “sustained rise in activity” and that the 12-month outlook is stronger than it has been for seven months.

In terms of employment numbers, the PMI figures suggest that employment numbers in the UK construction industry are still falling. However, the rate at which jobs are being lost has declined in the last month.

The Way the Industry Has Reacted

One of the factors behind the improving numbers here is the way that the industry has reacted to the challenges that 2020 has thrown up. For a start, there has been a notable shift towards working together rather than seeing other firms as direct rivals.

Another issue has been the increasing use of technology, such as cameras and sensors, to collect data in an efficient manner.

The fact that social distancing measures have caused fewer people to work on sites has also produced positive results, with streamlined management teams helping to increase productivity. Workers have managed to combine the new safety advice with existing guidelines for situations such as working at height or in the manufacturing of CE accredited fabrications.

A Look to the Future

It is clear that there is still a long way to go before the current crisis is a thing of the past. Yet, the effective way that the construction industry has reacted increases the hope that the effects of the economic crisis won’t be as harsh as first feared.