UK Construction PMI: labour shortage now the number one issue
Following the release of the latest UK Construction PMI today (7 January), Joe Sullivan, Partner at MHA, says the sector faces challenges from labour and supply shortages, as well as the spread of the Covid-19 Omicron variant, but overall confidence is high and work continues to flow in.
The availability of labour is now the number one issue within the UK construction sector, with wages continuing to rise. Staff mobility is high as people look for the best pay packets, causing further disruption. In addition, the spread of the Covid-19 Omicron variant has inhibited progress on building sites, dampening output and making planning even more difficult.
However, despite these challenges, confidence in the construction sector is still quite strong. There are signs that the supply chain crisis is easing. Firms have noticed small improvements in the availability of supplies and the rate of material price increases may have peaked. Although certain decisions may be deferred until the Omicron variant abates, all indications are that plenty of work is available as we begin 2022.
The recent 0.15% increase in the Bank of England base rate is unlikely to disturb the residential housing market, as strong demand persists, and most homeowners have fixed rate mortgages. It is the start of an attempt to curb inflation, but not an event to cause a concern to growth at present.