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CIOB responds to 24-year construction output high for June

Chartered Institute of Building

2 min read Partner content

The Chartered Institute of Building (CIOB) has responded to the latest IHS Markit / CIPS UK Construction PMI which saw UK construction output gaining momentum in May 2021.

Output has seen a significant increase over the past month and it is encouraging to see construction output growth has hit a 24-year high in June thanks to an increase in new work, delayed projects recommencing and a general increase in demand and confidence across the industry. However, such a sharp increase brings its own challenges. Over the past few months construction products and materials are in short supply and it is no surprise that latest figures from IHS Markit/CIPS UK show a sharp spike in the cost of construction products and materials.

The strong rise in output may be short-lived due to shortage of materials and labour availability. Over the next six months, CIOB anticipates the rate of growth will slow but remains hopeful that the level of activity remains at pre-pandemic levels which was seen from the Office for National Statistics (ONS) data for April 2021.

ONS data for May will be published this Friday (9 July) and should provide a good benchmark for how construction industry’s output is fairing against pre-pandemic levels.

Eddie Tuttle, Director of Policy,  External Affairs & Research at CIOB, said:

“Today’s figures indicate another sharp increase in UK construction output, with construction growth rising to its strongest levels in twenty-four years. We speculate that there has been a bumper period of work in the repair, maintenance and improvement sector as commercial offices, leisure and hospitality prepared for the loosening of Covid-19 restrictions. However, the PMI rightly reports on the imbalance in demand and supply of construction products and materials. This is set to lead to further cost pressures for contractors during a time of financial uncertainty and potential delays to existing and new projects." 

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