How is the Construction Industry Coping?
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There is bound to be quite a bit of instability in many industries after the last year or so, and many have suffered. The UK construction sector has been trying its best to claw its way back. According to studies, companies saw a consistent rebound in activity during December. There was also a slight rise in employment numbers thanks to an increase in demand for building work. It hasn’t all been smooth sailing though, as supply chains have been stretched, and UK port delays have resulted in the fastest rate of input cost inflation since April 2019. Projects in places like Essex, that were put on hold as the virus emerged early 2020, have commenced along with new work orders.
The UK Construction Total Activity Index posted 54.6 in December, not much change from November’s 54.7. House building increased in December, as did commercial activity, but civil engineering performed badly. In fact civil engineering activity fell for the fourth time in five months. Due to the growing workloads, there was consequently an increase in materials etc being ordered. This is despite the rising prices of steel and timber, good news for builders, plant manufacturers and companies like Rhinos Plant Hire.
The effects of Brexit continue to threaten the status quo however. Group director at the Chartered Institute of Procurement & Supply, Duncan Brock, said:
“Low availability for finished products and raw materials as a result of port disruptions added to builders’ woes. Suppliers named their price for goods in acutely short supply and input price inflation increased to its highest level since April 2019.
“Once again residential building was the strongest sector and construction companies focussed on this segment seem resilient for now.
“As the appetite for building resources grows in the first quarter of the year however, suppliers will find it difficult to ramp up production quickly to pre-pandemic levels, so we could see even longer delivery times potentially delaying some building projects as post-Brexit disruption also remains an ever-present threat.”
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