Housebuilding activity increased during September at the greatest rate seen since January. Many developers reported sustained demand and improved market conditions.
The upturn in residential property activity has assisted the construction industry in returning to growth, with the Purchasing Managers’ Index (PMI) showing its first growth for four months.
In September, the PMI reading was 52.3, above the score of 50 which represents stagnation. This figure was also above the 49.2 recorded in August and more than the 49 expected by economists.
Tim Moore, senior economist at IHS Markit and author of the Index, noted: ‘UK construction companies moved back into expansion mode during September, led by a swift recovery in residential building from the three-and-a-half year low recorded in June.’
‘Resilient housing market conditions and a renewed upturn in civil engineering activity helped to drive an overall improvement in construction output volumes for the first time since the EU referendum. A number of survey respondents noted that Brexit-related anxiety has receded among clients, although it remained a factor behind the ongoing decline in commercial building work.’
Given the need for new homes in Britain, the rise in new home construction is a sure step in the right direction. This should be helped by the announcement of Government support to increase new home delivery.
John Tutte, chief executive officer at Redrow commented: ‘It is encouraging to see housebuilding has not been impacted by Brexit and is underpinning an upturn in UK construction activity.’
‘At Redrow we have been gearing ourselves up for growth over a number of years, building many more high quality homes to create new sustainable communities in response to increased demand. Last year we increased completions by 17% and we have doubled our annual output over the past five years to 4,700 much-needed new homes-our forward order book is also at record levels,’ he continued.
Concluding, Mr Tutte said: ‘Any Government policy that has the potential to continue to accelerate housebuilding is very welcome but, as ever, the devil is in the detail and we are watching closely to see how this unfolds in the run to the Autumn Statement. Meanwhile, we are doing whatever we can continue to build more new homes, including efforts to boost the number and quality of the talented people we employ to overcome the skills shortage and also continuing to identify and acquire high quality sites.’