Construction out output reaches 7 month high

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Rises in house-building, commercial work and civil engineering helped output growth in the construction sector to hit a seven-month peak in September, according to the latest poll of construction buyers.

The survey, carried out by Markit and the Chartered Institute of Procurement and Supply (CIPS), rose from 57.3 in August to 59.9, its highest level since February.

This is well above the average result of 54.7 for the survey, in which questionnaires are sent to purchasing executives in more than 170 construction firms to get an indication of growth in the sector.

Staffing levels also shot up in September, the poll found, driven by greater workloads and optimism surrounding the business outlook at many companies.

According to the results, the growth in employment continued for the 28th month running, while the pace of staff hiring accelerated at its fastest rate since June.

But David Noble, CIPS chief executive, said that skills shortages continued to be a problem for many in the industry, making it difficult for many firms to find the expertise they require.

“Issues around skills shortages continued to be a drag on the sector with the resultant demand for higher salaries from the smaller pool of skilled staff,” he said.

“Companies reported higher staffing levels but it was a continuing challenge to find specialist skills as they struggled to rely less on sub-contractors to fill the gaps.”

Leading the way in the category of construction activity in September was house-building, which was helped by the strongest expansion in residential building for a year.

Commercial activity performed well, with the pace of growth at its highest level since the start of the year, while civil engineering work also rose for the fifth month in a row.

And the positive picture looks set to continue over the coming months as respondents to the survey reported feeling optimistic about growth in the year ahead.