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Solid overall expansion in construction activity recorded in November
Solid overall expansion in construction activity recorded in November

Solid overall expansion in construction activity recorded in November

A solid overall expansion in construction output has been recorded in November.

According to the IHS Markit/CIPS UK Construction Total Activity Index, the rate of activity in the construction sector hit a four-month high and continues the positive news, which saw October’s output rise at a faster pace than September.

The index was registered at 53.4, which is up from 53.2 in October and further away from the 50.0 no-change mark for the eighth month in succession.

This solid overall expansion signals the strongest rate of business activity expansion recorded since July and it is underpinned by job creation that is faster than any month since December 2015.

Elsewhere, the data from IHS Markit revealed that the residential building sub-sector has become the best-performing once again, with the fastest rate of house building activity recorded in three months.

Both the commercial and civil engineering sub-sectors have also contributed to the solid overall expansion, with sustained increases in both, according to the latest data.

A rise in client demand has helped to increase the rate of construction activity in November. However, some firms say new order growth is still being held back, with Brexit uncertainty a great contributor to this.

Reports also cited delays to public sector spending decisions.

In this context, it is perhaps surprising that business optimism throughout the construction industry has rebounded from the six-year low seen in October – the strongest degree of confidence seen for three months.

Tim Moore, Economics Associate Director at IHS Markit, spoke about the levels of optimism, and what held them back, despite the increase.

He said: “Business confidence regarding the year ahead outlook for construction work picked up from October’s recent low, but remained weaker than seen on average in the first half of 2018.

“Survey respondents widely commented that Brexit-related uncertainty had held back business optimism in November.”

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