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MNI (London)
--CIPS/IHS Markit UK Construction PMI 53.4 in Nov vs 53.2 in Oct
By Jamie Satchi
     LONDON (MNI) - The UK CIPS/IHS Markit construction sector PMI rose to 53.4
in November, up from 53.2 in October and above the MNI survey median of 52.5, a
report published Tuesday showed.
     Construction activity increased at a solid clip in November, boosted by
growth in new work and the fastest rate of job creation in just over of three
years.
     It was the eighth month in a row the headline index remained above the
neutral-50 mark and November's outcome was the best since July. 
     Still, business confidence remains fragile, with survey respondents
reporting that "Brexit-related concerns had weighed on their growth projections
for the next 12 months". 
     "November data indicates that the UK construction sector remains in
expansion mode, with resilient business activity trends seen for housing,
commercial and civil engineering activity," said Tim Moore, Economics Associate
Director at IHS Markit.   
     --FEEDTHROUGH TO HIRING
     Higher levels of new business contributed to "solid expansion of input
buying and rising employment" over November. 
     The pick up in hiring sentiment was the biggest since December 2015, while
delivery times lengthened on greater demand for construction products and
materials.
     "Higher levels of new work were recorded for the sixth month running in
November, which resulted in a robust and accelerated rise in staffing numbers,"
said Moore.  
     --SALARIES ON THE RISE
     A growing demand for constriction items led to another rise in input prices
during November. Higher transportation costs and rising staff salaries were
cited by firms.  
     "The latest upturn in employment was the fastest for almost three years. A
number of construction firms noted that greater demand for staff had led to
upward pressure on salaries in November," Moore added.
     --CLIENT DEMAND HIGHER
     There was anecdotal evidence that client demand boosted the sector in
November. The rate of new business growth picked up since October but, in the
greater scale of things, remained softer than seen on average in the Q3.
     Some purchasing managers noted that Brexit uncertainty had held back new
order growth, while there were also reports citing delays to public sector
spending decisions
     House building remained the fastest growing area of work, with the month's
rise in activity the strongest in three months. Commercial and civil engineering
work also recorded expansion in November.   
     --CHALLENGES REMAIN
     "Constrained supply chains were still underperforming as supplier
operations worsened again and to their weakest level for three months. Suppliers
reduced their stock levels and reports of raw material shortages gnawed away at
efficiency," said Duncan Brock, Group Director at the Chartered Institute of
Procurement & Supply. 
     "Adding to this challenging mix, prices for raw materials continued their
strong upward trajectory, so the pathway ahead is still far from clear of
blockages, Brexit-related or otherwise," he added. 
--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
[TOPICS: MABDS$,M$B$$$,M$E$$$,MT$$$$]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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