August 2020 construction PMI survey results
Contents |
[edit] Introduction
Construction sector growth slowed according to the IHS Markit/CIPS construction purchasing managers’ index (PMI) for August 2020. The headline seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index registered 54.6 in August 2020, down from 58.1 in July 2020. Figures above 50.0 indicate growth of total construction output.
While higher levels of activity have been recorded in each of the past three months, the latest expansion was the weakest over this period.
These statistics suggest a setback for the recovery in UK construction output, as improvements continue to slow in relation to the near five-year high in July 2020. Some survey respondents indicate that a lack of new work to replace completed contracts has halted growth.
All three broad categories of construction - housing, commercial and civil engineering - registered declines in comparison to July 2020.
Source: IHS Markit/CIPS.
House building has registered the strongest rebound since work stoppages were triggered in March 2020. This trend continued in August 2020, with the seasonally adjusted Housing Activity Index at 60.7. The figure for commercial work was 52.5; civil engineering activity was 46.6 in August 2020.
[edit] Orders hold back output growth
Total new business volumes increased for the third month running during August 2020, but the rate of expansion slowed from July 2020. Construction companies noted that economic uncertainty, especially from clients, has made it more challenging to secure new work. However, survey responses were varied, mirroring the multi-speed recovery experienced across different sectors.
Supply chain disruption persisted across the sector, which led to a sharp downturn in vendor performance. Stock shortages and an imbalance of supply and demand contributed to higher purchasing costs. The overall rate of input price inflation was the highest since April 2019.
[edit] Business expectations boosted by potential infrastructure work
Despite reporting subdued new business intakes since the start of the pandemic, construction companies reported an improvement in their business expectations for 2021. More than twice as many survey respondents (43%) expect to see a rise in construction output over the next 12 months as those that anticipate a fall (19%).
This optimism was linked to anticipated involvement in major infrastructure and public sector construction projects. However, this did not stop a decrease in staffing numbers. The rate of job losses slowed slightly compared to July 2020 but overall continued at the fastest pace over the past decade.
[edit] Related articles on Designing Buildings
- Business and Planning Bill 2019-21.
- Construction market forecast 2015 to 2024.
- Construction Purchasing Managers Index (PMI) survey results: May 2020.
- Coronavirus and the construction industry.
- New deal for infrastructure 2020.
- Procurement route.
- The future of the coronavirus furlough.
[edit] External resources
- IHS Market/CIPS, Construction sector growth slows in August.
Featured articles and news
HSE simplified advice for installers of stone worktops
After company fined for repeatedly failing to protect workers.
Co-located with 10th year of UK Construction Week.
How orchards can influence planning and development.
Time for knapping, no time for napping
Decorative split stone square patterns in facades.
A practical guide to the use of flint in design and architecture.
Designing for neurodiversity: driving change for the better
Accessible inclusive design translated into reality.
RIBA detailed response to Grenfell Inquiry Phase 2 report
Briefing notes following its initial 4 September response.
Approved Document B: Fire Safety from March
Current and future changes with historical documentation.
A New Year, a new look for BSRIA
As phase 1 of the BSRIA Living Laboratory is completed.
A must-attend event for the architecture industry.
Caroline Gumble to step down as CIOB CEO in 2025
After transformative tenure take on a leadership role within the engineering sector.
RIDDOR and the provisional statistics for 2023 / 2024
Work related deaths; over 50 percent from construction and 50 percent recorded as fall from height.
Solar PV company fined for health and safety failure
Work at height not properly planned and failure to take suitable steps to prevent a fall.
The term value when assessing the viability of developments
Consultation on the compulsory purchase process, compensation reforms and potential removal of hope value.
Trees are part of the history of how places have developed.