Tuesday, 12th January 2021 at 1:13pmDecember data for UK construction is cause for optimism

Recently published data for the UK construction sector illustrates a positive end to 2020. Strong underlying demand for new houses has resulted in the most optimistic growth forecasts since 2017 and employment figures are up for the first time in almost 2 years.

The IHS Markit/CIPS UK Construction Total Activity Index (catchy name, huh?) posted a score of 54.6 in December, where 50 indicates no change. This signifies sustained growth rates compared to November figures and is the seventh consecutive month where the Index has scored above 50.

Tim Moore, the economics director at IHS Markit, which compiles the data remarked: “it is encouraging to see the recovery driven by new projects and stronger underlying demand.”

There is a cautious sense of optimism that we are not simply seeing a rebound as the industry catches up on projects disrupted by the outbreak of the pandemic, but rather a sustainable growth phase for UK construction.

Despite output levels, the sector still faces a number of challenges, however. Mark Robinson, group chief executive at public procurement body Scrape, warned: “The impact of a third national lockdown and increased social distancing measures are likely to affect the speed at which future projects are brought forward, including decisions on private investment and important urban regeneration.

“The public sector continues to be the main vehicle for contractor growth and investment in communities, backed by increased government funding. These projects remain best-placed to set the standard for the progressive and ambitious goals set out in the new Construction Playbook.”