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The latest PMI data has recorded the fastest rise in output in construction since mid-2021, showing the industry is gaining momentum as 2022 progresses.

Client confidence is reflected in the growing business activity across the board as work on new projects gets up and running. This growth is being seen even amongst the materials supply issues that are well reported, as well as rapidly increasing input costs.

The latest data from IHS Markit/CIPS UK Construction PMI® Total Activity Index registered 59.1 in February, a jump of almost a full three points since January (56.3). This latest data means that the index has posted above the neutral 50.0 threshold for the past 13 months.

Looking across the sectors, all the major categories showed increases, with house building registering at 61.5, thus replacing commercial work as the best performing category. This latest increase was the strongest for eight months. Commercial construction also expanded at a quicker pace than in January, with the rate of growth the sharpest since last July. Meanwhile, civil engineering activity (index at 57.5) increased at an accelerated pace that was the strongest since June 2021.

New order growth accelerated for the fourth month running in the latest survey period to extend the current sequence of expansion to 21 months. Moreover, the rate of growth was the fastest since last August as construction companies commented on stronger client demand in line with the recovery in economic activity and new projects being brought to tender.

Overall construction companies reported confidence in near term outlook, with some concerns over rising costs and supply shortages.

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, said: “The construction sector maintained its growth momentum whilst battling a number of headwinds such as supply issue and higher input costs to put in its best performance for eight months in February.

“All three sectors offered positive news, but housing stormed ahead with the strongest rise in residential building since June last year. The reasons for this improvement ranged from securing contracts in the pipeline of new work and improved deliveries for some materials. That said, hampered supply chains still made business difficult across all sectors and deliveries remained painfully slow.”

Fraser Johns, finance director at Beard said: “Despite some bumps in the road, the construction sector continues to recover and there is hope that the future looks bright.

“The highest rise in order books for six months confirms that client confidence is building and there are opportunities for construction firms.

“The vacancies in the construction sector also present an opportunity to increase diversity. With labour shortages impacting across the board, more needs to be done to encourage people into the sector.

“The industry needs to create an inclusive environment that makes a career in construction appealing to people who might not otherwise have considered it as an option.”

Gareth Belsham, director of the national property consultancy and surveyors Naismiths, commented: “The industry has now seen 21 straight months of increasing new orders. Buoyed by wider economic growth, demand from developers remains strong and contractors can take their pick of tenders.

“There are just a couple of flies in the ointment. The economic blowback of international sanctions on Russia could ripple through the industry in the form of renewed inflation in coming months. As well as oil and gas, Russia is also an important source of timber – and this supply may now be completely halted.”

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