Latest data released by Markit/CIPS – 5 August 2021
That’s a big fall in construction output as activity eases from the 24-year highs in June to the slowest since February. House-building remains the key pillar driving overall activity but businesses are saying that they are struggling to keep with demand in the construction sector amid raw material supply shortages. Markit notes that:
“July data marked the first real slowdown in the
construction recovery since the lockdown at the start of this
year. It was unsurprising that UK construction companies
were unable to maintain output growth at the 24-year high
seen in June, especially with widespread supply shortages
and constrained capacity to take on additional orders.
The loss of momentum spanned all major categories of
construction work and was most pronounced in the house
building sector.“Long lead times for materials and shrinking sub-contractor
availability were cited as factors holding back work on site.
Around two-thirds of the survey panel experienced longer
wait times for supplier deliveries in July, while just 2%
reported an improvement since the previous month.“Another rapid increase in purchasing costs was linked to
global supply and demand imbalances, but many firms
also noted that local issues had amplified inflationary
pressures. These included a severe lack of haulage
availability, continued reports of Brexit trade frictions,
and greater shortages of contractors due to exceptionally
strong demand.”