UKCW 2018

NEC BIRMINGHAM   09-11 OCTOBER 2018

Brexit vote

UK construction activity rose at the fastest pace in eight months in November, though economists warned that rising costs in the sector were squeezing profit margins.

Business activity and new orders grew at the strongest pace since March, according to Markit’s private sector survey, as some companies said workloads were boosted by a “resumption of projects delayed after the Brexit vote”.

The rise drove further increases in employment, while commercial activity edged into growth for the first time since before the referendum result.

The IHS Markit/CIPS construction purchasing managers’ index rose to 52.8 in November, from 52.6 in October, keeping it well above the 50 level that signals growth.

While the reading was the highest since March, Markit noted that activity levels remained below the average of the past two years.

Echoing a similar survey of manufacturers this week, Markit also said the sharp fall in the pound following the referendum result had led to a steep rise in costs, which rose at the fastest pace in more than five years.

It said the impact of the weaker pound was “widely felt”, with higher prices reported “for a number of materials including bricks, blocks and slate, as businesses struggled with managing costs”.

Tim Moore, senior economist at Markit, said: “A number of firms cited uncertainty related to supplier price hikes as an emerging threat to the construction sector, with survey respondents commenting on difficulties forecasting project costs against a backdrop of rapidly changing inflationary pressures.”

It came as official figures showed foreign direct investment flows into the UK climbed from £15bn in 2014 to a net £21.6bn in 2015.

By contrast, the net flow of investment from the UK was negative, indicating the sale of foreign investments and money returned to the UK.

The stock of foreign direct investment into the UK from Europe dipped for the first time in almost a decade, the Office for National Statistics (ONS) said.

Investment positions from Europe slipped from £600.9bn in 2014 to £535.3bn at the end of last year. Funds from the US increased, however, driving up investment in the UK from the Americas, which rose from £323.6bn to a record high of £327.5bn.

Source: The Telegraph

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