Commercial work booms as construction gets off to January flyer

Commercial work led the way as the bellwether IHS Markit/CIPS UK Construction PMI hit 56.3 in January, up from 54.3 in December.

It was the 12th month in succession the index was above the crucial 50.0 no-change mark and the strongest rate of output expansion since July 2021.

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There were also encouraging signs for the near-term outlook as new orders rose at the fastest pace since August 2021 and input buying was the strongest for six months.

Strong pipelines of new work encouraged additional staff hiring in January which was the best month for job creation since last October.

Construction companies remained highly upbeat about the business outlook. More than half of the survey panel (53%) forecast a rise in output during the year ahead, while only 5% predict a decline.

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Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, said: “Builders enjoyed their best month since July, bouncing back from December’s doldrums as opportunities unfurled in terms of new orders, job creation and optimism offering a strong start to 2022.

“Pipelines of commercial work snapped back into action as businesses were more confident in their investment decisions and the sector came out on top with the strongest gap in output growth compared to the residential sector in almost six years.

“House builders became January’s laggards raising concerns that higher interest rates and consumer inflation could feed into a further slowdown in the coming months as affordability rates are weakened.


“There was some light at the end of the tunnel where supply chains showed signs of improvement and the best delivery times since September 2020.

“However, the rapid upturn in activity is putting more pressure on suppliers still in recovery while there are shortages in skilled labour and a lack of reliable transportation adding to their woes.”

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