The fastest rise in construction activity since 1997 risks being undermined by price increases and a shortage of building materials, warns the Federation of Master Builders. 

Commenting on the latest figures from the Purchasing Managers’ Index (PMI), FMB chief executive Brian Berry said: “The building materials shortage is disproportionately affecting small builders and threatening their recovery from the pandemic despite strong growth in the construction sector.” 

“The materials shortage is proving a serious detriment to both businesses throughout the supply chain and consumers. As the country reopens for business, it’s imperative that building firms have better access to the materials they need to build,” he said.

The recovery in UK construction output gained further momentum in June, according  to  the  latest  PMI  data. Overall construction activity expanded at the fastest pace for 24 years, supported by  another sharp rise in new orders. Delivery times lengthened to the greatest extent since the survey  began, surpassing the previous record set in April 2020. 

Severe shortages of construction products and materials resulted in a survey-record rise in purchasing prices in June. Sharp increases in business activity were also seen across the main areas of the construction sector monitored by the survey. 

Construction work in the housebuilding category increased at the fastest pace since November 2003. Adding to cost pressures in June was the steepest rise in rates charged by sub-contractors since the survey began. 

Construction companies remain optimistic about growth prospects for the next 12 months. However, the degree of confidence eased to its lowest since January, in part reflecting concerns about labour availability and the sustainability of the recent surge in demand. 

7 July 2021