UK markets open in 5 hours 5 minutes
  • NIKKEI 225

    28,979.42
    +470.87 (+1.65%)
     
  • HANG SENG

    28,772.09
    +150.17 (+0.52%)
     
  • CRUDE OIL

    61.09
    -0.26 (-0.42%)
     
  • GOLD FUTURES

    1,797.60
    +4.50 (+0.25%)
     
  • DOW

    34,137.31
    +316.01 (+0.93%)
     
  • BTC-GBP

    38,986.50
    -1,246.41 (-3.10%)
     
  • CMC Crypto 200

    1,257.10
    -5.86 (-0.46%)
     
  • ^IXIC

    13,950.22
    +163.95 (+1.19%)
     
  • ^FTAS

    3,935.64
    +15.59 (+0.40%)
     

UK builders' orders at six-year high as property boom rides out lockdowns

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Tom Belger
·Finance and policy reporter
·3-min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
A construction worker builds a new house in Berkhamsted, Britain. Photo: Matthew Childs/Reuters
A construction worker builds a new house in Berkhamsted, Britain. Photo: Matthew Childs/Reuters

UK construction firms saw growth in trade accelerate in November, with new orders at their highest since 2014 and output rising for a sixth month in a row.

A leading business survey showed a rising proportion of building companies reporting higher trade compared to October. Firms said Britain’s housing market boom and rising client confidence in civil engineering boosted the ongoing rebound from the collapse in activity seen earlier this year.

Only 16% of firms expect declining trade over the year ahead, according to new purchasing managers’ index (PMI) data on Friday.

"The energy behind this success was primarily the housing sector as sales remained buoyed by consumers rushing to meet the stamp duty relief deadline less than four months away and a rise in home improvement projects for locked down citizens,” said Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS), which co-compiles the survey.

READ MORE: UK economic recovery went into reverse as second lockdowns hit firms

It comes in spite of England's lockdown throughout November, with similar measures in Wales, Northern Ireland and parts of Scotland for some of the month. English building sites were able to remain open, while estate agents also remained open and property viewings and surveys continued.

The headline PMI figure for construction firms rose to 54.7 in November, on an index where readings above 50 show most firms expanding and below 50 show decline. It had come in at 53.1 in October. Housebuilding saw the most widespread growth in trade.

UK construction firms saw a sixth month of growth in November, indicated by readings over 50 on a closely watched purchasing managers' index (PMI). Chart: IHS Markit / CIPS.
UK construction firms saw a sixth month of growth in November, indicated by readings over 50 on a closely watched purchasing managers' index (PMI). Chart: IHS Markit/CIPS

Firms said they were now moving from catch-up work to new projects, with clients releasing budgets held back earlier in the pandemic. But demand left supply chains overstretched, sparking the biggest rise in purchasing costs since April 2019.

Employment also continued to fall as firms still looked to cut costs. Commercial work saw its slowest growth in six months, with demand subdued for office, retail and other corporate projects.

It comes after similar data for the UK services sector this week showed a reading of 47.6, with most firms facing declining trade under the impact of coronavirus curbs.

Yet the services fall marked a less severe decline than in October, than earlier estimates had suggested and than the UK lockdown earlier this year, despite the impact of restrictions.

READ MORE: EU stockpiles UK factory goods as firms brace for Brexit disruption

Meanwhile factories saw growth accelerate last month, boosted by ‘Brexit buying’ as EU firms stockpiled amid fears of disruption after the transition period ends on 31 December.

Production neared a three-year high in November. The headline figure for manufacturing came in at 55.6, up from 53.7 in October.

Official figures suggest Britain’s GDP will contract

WATCH: UK economy will contract this year by 11.3%