BCIS CapX provides a comprehensive, detailed and easy-to-use method of measuring cost movement for building and civil engineering. Widely used in the construction and infrastructure sector to help fairly allocate risk between the client and sub-contractors.
Published: 09/12/2024
Construction activity picked up in November, according to the latest update to the S&P Global UK Construction Purchasing Managers’ Index.
The PMI, which tracks changes in the volume of business activity through a monthly survey of around 150 construction firms, registered 55.2 in November 2024, up from 54.3 in October 2024. Anything above 50 signifies an overall increase in activity, and the index has now shown growth for nine consecutive months.
At a sector level, commercial work saw the strongest increase for 2.5 years, with respondents pointing to improving customer demand and new opportunities to tender, despite relatively subdued economic conditions.
Civil engineering activity also increased, though at a slower rate of growth than has been seen for three months.
Housebuilding again showed decreased activity in November, at the fastest rate of decline since June. Elevated borrowing costs and fragile consumer confidence reportedly had an adverse impact on demand.
S&P Global also reported:
- New business volumes increased for the tenth successive month.
- A marginal rise in employment numbers, with the rate of job creation at a three-month low. Increasing employment costs was said to be a factor in holding back on staff hiring.
- An increase in subcontractor usage for the first time since July and the steepest increase in subcontractor charges for 16 months.
- The fastest rise in average cost burdens for 18 months, linked to an increase in raw materials as well as suppliers looking to pass on higher employment costs.
- 43% predict an increase in business activity in the next 12 months; 21% expect a reduction. This degree of optimism was the lowest it has been for 13 months.
- Anecdotal evidence of the UK economic outlook and employment cost increases weighing on business optimism.
Dr David Crosthwaite, BCIS Chief Economist, said: ‘I’m waiting to see the relative positivity reported in the PMI translate into actual growth in our sector. BCIS is reporting a much more subdued picture with output growth predicted to fall this year and rise only slightly through next year.
‘Inflationary impacts are also expected to return to input costs following the Budget, with cost inflation in both labour and materials expected to rise.’
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