MNI: UK Construction Output Rebounds to Five-Month High

--UK November CIPS/IHS Markit Construction PMI 53.1 Vs 50.8 October 

--Housing Drives Rebound, Commercial, Civil Engineering Work Fall

By Jamie Satchithanantham

     LONDON (MNI) - The UK construction sector recorded a moderate rebound in

November with business activity, new orders and job growth all growing at the

fastest pace since June, a survey showed Monday.

     The headline IHS Markit/CIPS UK Construction Purchasing Managers' Index

reading rose to 53.1 in November from 50.8 in October. The PMI has now sat above

the 50.0 no-change value for two straight months with November's reading the

highest for five months. After recording a 17-month high of 56.0 in May, the PMI

slipped into contractionary territory and remained there before climbing above

50.0 in October. 

     House building once again provided the primary source of momentum within

the construction sector during November. According to IHS Markit, "resilient

demand and a supportive policy backdrop had driven the robust and accelerated

upturn in residential work". 

     Commercial construction, like for much of 2017, was the weakest performing

area of the survey with Brexit related uncertainties and a subdued economic

outlook both cited as holding back client spending. 

     Civil engineering output fell for the third straight month in November, and

although the fall-back between October and November was marginal it the longest

phase of decline seen in over four years. 

     Across the sector in general, new orders climbed to a five-month high, with

anecdotal evidence of a general improvement in client demand after the soft

patch this summer, which also saw supplier delivery times rise. 

     Cost inflation stood at its least marked level for just over a year with

some firms reporting that exchange-rate driven price rises had started to lose

intensity. 

     "Once again, resilient house building growth helped to offset lower volumes

of commercial work and civil engineering activity...residential projects

underpinned the rebound in total new order growth to its strongest since June,

helped by strong demand fundamentals and a supportive policy backdrop," said Tim

Moore, Associate Director at IHS Markit and author of the IHS Markit/CIPS

Construction PMI. 

     "Business optimism across the construction sector remained relatively

subdued, but picked up from the near five-year low seen in October. This

represented the first improvement in confidence for three months, which

construction firms attributed to increased sales enquiries and hopes that risk

aversion among clients will recede over the course of next year," he added. 

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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