Britain’s builders have also been hit by supply chain problems in August.
The UK construction sector grew at the slowest pace since February, as “sustained, and severe, supply chain disruption” hit building firms, and drove up costs sharply.
Data firm IHS Markit reports that its UK Construction PMI fell to 55.2 in August, down from 58.7 in July.
That shows a sharper slowdown than expected, as the restricted supply of materials and transport began to weigh on overall construction activity [any reading over 50 shows growth].
Builders reported that supply chains were stretched, with some struggling to either source raw materials and parts, or receive them, as supplier delivery times continued to lengthen.
Ongoing material shortages are being exacerbated by a lack of transport and freight availability, and congestion at the ports, the report says.
Usamah Bhatti, Economist at IHS Markit, explains:
Supply chain disruption continued to disrupt activity across the UK construction sector, as demand for materials and logistics capacity outstripped supply.
Average vendor performance continued to deteriorate at a near-survey record rate, as firms noted severe shortages of building materials, a lack of available transport capacity and long wait times for items from abroad due to port congestion.
This drove up input cost inflation, which accelerated at the second-fastest rate in the 24-year history of the survey (beaten only by June’s record rise).
Builders said concrete, fuel, steel and timber all jumped in price, for example.
Growth slowed across housebuilding, commercial work and civil engineering activity, with a dip in new order growth too.
Job creation fell to a four-month low, as rising costs and “a lack of skilled workers” led to a slowdown in hiring.
Markit points out that the supply chain crisis is weighing on client confidence too:
Businesses noted a continued resumption of projects that had been delayed due to Brexit and the COVID-19 pandemic, though client confidence was dampened by volatility in raw material supplies and increased cost burdens.
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