Construction Activity In The UK Falls

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There has been a drop in UK construction activity in the past month, according to the latest construction Purchasing Managers’ Index (PMI) released by IHS Markit and the Chartered Institute of Procurement and Supply (CIPS).

According to its data, construction activity slowed in September, recording 48.1 last month, compared to the 51.1 posted in August. More importantly, it’s fallen below the 50.0 ‘no change’ level, which means the sector contracted slightly.

This is the first time in more than a year that the UK’s construction sector has experienced a contraction, and it’s the sharpest contraction since July 2016.

However, it wasn’t all bad news as housebuilding was named as the only broad area that experienced growth in September. Despite still recording an expansion though, the PMI data revealed that activity slowed last month, which could signal a longer-term slowdown reaching into this sector as well.

Tim Moore, associate director at IHS Markit and author of the report, described the slide of the housebuilding sector as a demonstration that “fragile confidence has spread across all three key market segments”.

He went on to explain that some firms felt that a slowdown in residential construction was a reflection of the fact that more housebuilders are concerned about “the outlook for ultra-low mortgage rates and less upbeat demand expectations”.

Director of customer relationships at CIPS Duncan Brock added that respondents cited the uncertainty surrounding Brexit as one of the factors that put a dampener on the construction and engineering sectors as a whole.

He said that the lack of clarity about the UK’s exit from the EU was “freezing clients into indecision over new projects”.

Earlier this month, Sajid Javid, communities secretary, said that a new approach was required for planning new home construction across the UK. At present, local councils set out their plans of how many new homes they’ll build in their local plan, but Mr Javid believes the system is not working.

In the new housing whitepaper, the government intends to introduce a standardised method for calculating each local authority’s housing need.

Under these new proposals, some local authorities would be asked to build up to 40 per cent more homes than currently planned.

Commenting at the white paper’s launch, Mr Javid said: “The simple truth is that for far too long we haven’t built enough homes and we don’t build them quickly enough.”

He added that his new system will mean there is a “clear and realistic assessment of how many new homes are needed”. However, some councils criticised the plans stating that the formula developed by Whitehall didn’t take into account the complexities of local needs.

Speaking to the BBC, Local Government Association housing spokesman Martin Tett commented: “It is crucial that councils and communities can lead new development in their areas.”

Making use of timber manufacturers to create the frames for new homes is one way of speeding up the building process and ensuring that the houses constructed are of a high quality once they’re finished. If you’d like advice about timber frame construction, contact us today.

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