Construction output within the housing sector has fallen at its lowest rate since May 2019, and the homebuilding industry is embracing this new positivity. 

The findings from the IHS Markit/The Chartered Institute of Procurement & Supply’s Purchasing Managers’ Index construction survey also revealed that construction companies are most upbeat about their growth prospects since April 2018.

Homebuilding was the best performing broad area of construction activity, with output falling only slightly in January, according to the results.

“The housing sector in particular was the strongest performer [within the construction sector], with the best result since May 2019,” the authors wrote. 

The authors also reported that, anecdotally within the sector, receding political uncertainty was attributed as a boost for client demand, with renovators and extenders more likely to spend after the General Election.

These findings align with a recent survey from the Federation of Master Builders (FMB) which reported 37% of builders predict higher workloads in 2020 following December’s General Election.

Construction And Housing on the Rise

Residential development appears to be on a healthy incline, and new business volumes were also close to stabilisation, which contrasted with the sharp falls seen between September-December 2019. 

Tim Moore, economics associate director at IHS Markit, said of the findings: ‘Despite concerns about prospects for work on infrastructure projects, latest data revealed a strong rebound in business optimism across the construction sector as a whole in January. 

“The degree of positivity reached its highest level since April 2018, driven by hopes that improving confidence among clients will continue to translate into new contract awards over the course of 2020.”

However, the FMB warned that this sector upturn should be used to support investment in training builders and encouraging the next generation of builders to take up their tools. 

Brian Berry, chief executive of the FMB, said: “Construction is recovering from last year’s instability as we go into the new decade. It’s essential that industry uses this opportunity to commit to training and upskilling. FMB research shows that more than half of builders can’t hire bricklayers and carpenters. Site managers are also in short supply. 

“With entry-level construction apprenticeship starts on the decline, as well as starts for young people, the Government must make a commitment to supporting small businesses who do most of the training.”

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