Construction output grows amidst ongoing industry challenges – with solutions offered

Signs suggest supply chain issues are beginning to ease, as construction output grows

This week saw the release of the latest IHS Markit / CIPS data on construction output, which raised hopes that the current supply chain issues affecting the industry may be starting to ease.

The latest PMI data drawn up by Markit / CIPS revealed that activity for October stood at 54.6, up from 52.6 in September.

Meanwhile, the construction products manufacturing sector expanded for a fifth successive quarter in the third quarter of 2021, according to the latest Construction Products Association (CPA) state of trade survey, with 44% of heavy side manufacturers reporting an increase in sales in the period from July to September 2021.

However, CPA data did reveal the cost pressures currently experienced by the sector, with prices rising across both heavy and light side manufacturing. This looks set to continue, with cement producers warning of a 16% price rise at the end of this year.

There are signs that supply chain issues may soon begin to ease, though. The Mineral Products Association (MPA) this week revealed that sales of primary aggregates and ready-mixed concrete were 6.7% lower in Q3 2021 than in the previous quarter.

The MPA survey is seen as a direct indicator of construction activity, due to mineral products representing the biggest volume of materials used in construction.

RICS survey highlights industry threats amidst suggestions for solutions

The latest Royal Institution of Chartered Surveyors (RICS) survey results were published this week, highlighting the myriad challenges facing the construction industry.

Whilst workload remains strong, the level of factors affecting building activity have increased in Q3 2021 when compared to the preivous quarter. Shortage of materials was the largest culprit, with 89% of respondents stating that supply chain issues were affecting construction activity. Over 80% of respondents also stated that labour shortages were hampering the market.

Source: RICS

However, a number of institutions have offered solutions to the housing crisis. The Building Back Britain commission, which includes senior figures from Mace, Barratt and Legal & General, suggested this week that regional training hubs, called ‘construction clusters’, should be founded to increase the labour workforce and foster new skills.

These hubs will improve training available to workers – as well as teaching new methods of construction – in order to meet the Government’s target of 300,000 new homes every year.

Meanwhile, Places for People published a report this week which seeks to explain the factors influencing the housing crisis, and offers recommendations to improve property affordability.

Amongst other suggestions, Better understanding the housing market states that change in national policy is required in order to meet housebuilding targets, with overhauls to the planning system, the way land is bought, and calls upon Homes England to identify at least ten new growth areas across England.

Countryside announces net zero strategy

This week saw mixed-tenure devloper Countryside launch its net zero strategy, aiming for a decarbonised economy and society by 2030.

The developer detailed various routes to achieving net zero, including switching to hydrotreated vegetable oil for on-site plant by 2023, and planting 250,000 new trees by 2025.

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