Latest PMI survey reports continuing growth across the industry but warns of increasing supply chain bottlenecks
Construction firms are finding it increasingly difficult to obtain blocks and bricks as supply chain bottlenecks tighten amid continuing growth across the industry.
The latest Markit/CIPS Purchasing Managers Index, which measures the rate of increase or decrease in the activity of purchasing managers, showed a slight rise in September, with a score of 64.2, up from 64.0 in August.
But with the measure well above the 50.0 mark that separates expansion from contraction, Markit/CIPS said the survey “signalled a sharp expansion of overall construction output that was the steepest since January and the second fastest seen over the past seven years”.
The survey found growth was supported by sharp rises in housing, commercial and civil engineering activity.
However, the survey also found that while the overall performance of the sector was close to its strongest since summer 2007, it also indicated that growth in new orders and job creation had eased to their lowest rate for four months.
The survey also found that supply chain pressures had resulted in further steep increases in costs, a squeeze on subcontractor availability, as well as further delays in receiving materials.
The survey warned that alongside pressures on skilled staff availability, firms are also experiencing ongoing supply chain bottlenecks in the wake of strong demand for construction materials.
The survey found delivery times from vendors lengthened sharply over the month, with survey respondents mainly citing low stocks of bricks and blocks at suppliers.
David Noble, Chartered Institute of Purchasing & Supply chief executive said: “Pressure points in the industry are becoming ever more acute as suppliers race to catch up after years of caution and capacity cutting.
“This is borne out in supply chain bottlenecks as a result of strong demand for construction materials, a squeeze on subcontractor availability and the lengthening of vendor delivery times.
“Years of caution may now impede the sector’s performance if suppliers cannot re-stock and hire at a speed that demand requires.”