The latest
Sharp rises in business activity across the three main sectors of the construction industry drove the over two-decade high expansion.
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Housebuilding was the strongest sector, reaching 68.2 in June, the fastest pace of growth since
Strong demand in the
Commercial work recorded a reading of 66.9, notching another long-term high – output growth was the strongest since
Civil engineering activity rose sharply in June (60.7), but the speed of growth eased to a three-month low.
Total new orders across the construction industry have now increased for 13 successive months, although the latest expansion was slower than May’s survey-record high.
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“The headline index signalled the fastest rise in business activity across the construction sector for 24 years. Total new orders expanded at one of the strongest rates since the summer of 2007, mostly reflecting robust demand for residential projects and a boost to commercial work from the reopening
Strong demand in the industry prompted constructors to rapidly scale staffing levels to boost production capacity in order to cope with swelling backlogs of work.
The rate of job creation moderated since May but remained among the fastest seen over the past seven years.
Input inflation climbs at record pace
Despite the strong growth in output, prices for raw materials rose at their fastest pace on record, caused by severe supply and demand imbalances.
Average prices paid for products and materials increased at a survey-record pace, caused by firms competing with each other to secure key inputs amid severe shortages,
Widespread scarcity of essential products resulted in a slowing down of completion times as construction firms had to deal with poor availability of construction components.
The survey recorded its worse month for supplier delays since the it began just over 24 years ago, and over 77 per cent of constructors reported longer lead times among suppliers.
“Supply chains once again struggled to keep up with demand for construction products and materials, with lead times lengthening to the greatest extent since the survey began in April 1997” Moore said.
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“Escalating cost pressures and concerns about labour availability appear to have constrained business optimism at some building firms.”
“The meagre availability of raw materials placed obstacles in the path of stronger workflows where supplier delivery times extended into record-breaking territory once again and surpassed the height of disruption when the pandemic first hit.”
Concerns about intense inflationary pressures among producers is fuelling concerns that firms may start passing on higher costs to consumers.
Latest data from the ONS shows annual
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