The IHS Markit/CIPS UK construction PMI® rebounded from 44.4 in December to 48.4 in January. While still reflecting contraction in the market, the latest reading reflected a substantial slowing in the rate of decline.
New business volumes showed only a slight decline, contrasting with the sharp falls experienced in the final quarter of 2019.
House building was the best performing sector in January with output falling only slightly, and at the slowest pace since May 2019. Commercial activity decreased for the thirteenth consecutive month but the rate of contraction was significantly weaker than in December. Survey respondents noted that reduced domestic political uncertainty had the potential to unlock new projects.
The civil engineering sector performed worst in January. Companies reported a shortage of tender opportunities to help replace completed infrastructure contracts.
Average cost burdens increased at “a robust and accelerated rate” in January – the sharpest since July 2019, with respondents identifying higher fuel and haulage costs, plus higher costs for imported materials as the main causes.