Construction sector fortunes 'mostly rosy' despite growth easing amid Covid restrictions

The UK’s construction sector continued to grow last month but slowed to its lowest rate since the end of summer as some firms said tighter Covid restrictions “held back” the sector's recovery.

The closely monitored IHS Markit/Cips UK construction purchasing managers’ index (PMI) hit a reading 54.3 for last month, down from 55.5 in November. Any reading above 50 points to growth.

The slowdown came as restrictions kicked in telling people to work from home where possible following a surge in coronavirus cases.

Tim Moore, director at IHS Markit, said: “UK construction companies ended last year on a slightly weaker footing as renewed pandemic restrictions held back the recovery, especially in commercial work and civil engineering.

Experts remained upbeat noting that half of construction firms were predicting further increases in demand during 2022.

“Some firms commented on disruption from rising Covid-19 cases, while others noted a lack of new work to sustain the rapid growth rates seen earlier in 2021.”

Gareth Belsham, director of national property consultancy and surveyors Naismiths, said: “Despite the slowing headline rate of growth, the PMI’s latest snapshot of the construction industry is mostly rosy.

“Even with the disruption caused by the Omicron variant, business sentiment remains strong - with half of construction firms predicting further increases in demand during 2022 - and inflationary pressure is easing.

“Several of the supply bottlenecks that emerged during the boom months of 2021 - in which the demand for materials far outstripped supply - are finally beginning to clear as manufacturers step up production.”

The figures revealed that civil engineering firms reported a slight decline in work for the month, with a 49.1 reading ending a nine-month period of growth.

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