Housebuilding Growth as Brexit Gloom Recedes

June 13, 2017 by


Last month’s rebound in the construction sector was propelled by a sharp increase in housebuilding.

Overall, industry activity rose at the quickest pace in close to a year and a half.

The survey results suggested that the sector was displaying a strong recovery from a relatively slow start at the beginning of 2017. Economists said that the sobering influence of the EU referendum appeared to be receding.

The purchasing managers’ construction index, one of the leading indicators of industry well being, reported business activity jumping to 56, which suggests the strongest growth since December 2015.

A sharp and sustained increase in housebuilding development drove the advance, which represented a bounce back from last March’s seven-month low. Developers attributed the rise in housebuilding to both strong underlying conditions and a strengthened pipeline of new development projects.

Chartered Institute of Procurement & Supply director Duncan Brock said that after years of slow housebuilding activity, the construction sector snapped back to life last month.

He stated that construction industry growth has reached its greatest height in 17 months as Brexit uncertainty appears to be receding. The unexpected recovery has manifested itself most acutely in residential housing, as builders finally feel ready to meet the demand for new homes.

Another area that continued to flourish was civil engineering. The weakest part of the sector was commercial development.

The bigger housebuilding workload resulted in an equally strong increase in new jobs, while growing demand for construction materials applied added pressure to supply chains. Delivery times extended to their greatest length since March 2015.

However, raw materials cost inflation appears to have surpassed its peak after rising significantly in recent months due to the lower performance of the pound, which subsequently  raised import costs. Survey respondents also stated that the lower exchange rate led to energetic negotiations with suppliers.

Mike Chappell, Lloyds Bank Commercial Banking managing director for construction, said that while universal focus is on the general election that is on the horizon, the UK construction sector is carrying on with the job at hand, a conclusion supported by the survey. There is also anecdotal evidence that last year’s EU referendum has had little effect on trading activities.

The strong growth in construction activity was much better than analysts had been anticipating and comes after an equally encouraging PMI survey, which suggested that the sector was in increasingly better health.

About CRL

CRL’s specialist team arrange structural defects insurance to protect thousands of new ventures throughout the UK and Ireland. CRL assist in sourcing fast, flexible cover, arranged by the in-house team who are dedicated to providing the highest quality of customer service.

Anyone engaged in a building project or managing a portfolio of new-build properties that require mortgages, will require a 10-year structural insurance policy on the property. CRL recognises that every opportunity is different, there are no tick boxes and no set criteria – just an appetite for adventure!

To find out how you can start working with CRL and purchase a structural warranty, visit what we cover.


You may also be interested in...

  1. Want to Make a Big Profit on your Self-Build project? Best Towns Revealed

    A developer has revealed the top 20 London commuter towns where self-builders can turn a profit- provided you have a couple of million pounds ready to turn your designs into reality. Esher and Weybridge in Surrey and Harpenden in Hertfordshire headed a list of 20 locations identified as the most profitable places to self-build, as…

    November 28, 2016 by

    self build house insurance Read more
  2. Birmingham Council to approve 500 new homes

    A £64 million scheme to build 500 new homes and apartments will go up for approval in Birmingham next week. The cabinet will be asked to give their support to the major new home building programme headed up by Birmingham Municipal Housing Trust on the 18th October.  The plans include the rejuvenation of the Bromford…

    October 12, 2016 by

    new home protection insurance Read more
  3. Dozens Show Interest in Shropshire Self-Build Project

    The scheme, which will be situated on six hectares at London Road in Shrewsbury, will contain enough room for approximately 45 aspiring homeowners to build their own residences. Nick Wood, planning officer for Shropshire Council, stated that the planning department is presently discussing potential restrictions that may be placed on the property designs, to ensure…

    February 5, 2016 by

    Read more