August 2020 construction PMI survey results
Contents |
[edit] Introduction
Construction sector growth slowed according to the IHS Markit/CIPS construction purchasing managers’ index (PMI) for August 2020. The headline seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index registered 54.6 in August 2020, down from 58.1 in July 2020. Figures above 50.0 indicate growth of total construction output.
While higher levels of activity have been recorded in each of the past three months, the latest expansion was the weakest over this period.
These statistics suggest a setback for the recovery in UK construction output, as improvements continue to slow in relation to the near five-year high in July 2020. Some survey respondents indicate that a lack of new work to replace completed contracts has halted growth.
All three broad categories of construction - housing, commercial and civil engineering - registered declines in comparison to July 2020.
Source: IHS Markit/CIPS.
House building has registered the strongest rebound since work stoppages were triggered in March 2020. This trend continued in August 2020, with the seasonally adjusted Housing Activity Index at 60.7. The figure for commercial work was 52.5; civil engineering activity was 46.6 in August 2020.
[edit] Orders hold back output growth
Total new business volumes increased for the third month running during August 2020, but the rate of expansion slowed from July 2020. Construction companies noted that economic uncertainty, especially from clients, has made it more challenging to secure new work. However, survey responses were varied, mirroring the multi-speed recovery experienced across different sectors.
Supply chain disruption persisted across the sector, which led to a sharp downturn in vendor performance. Stock shortages and an imbalance of supply and demand contributed to higher purchasing costs. The overall rate of input price inflation was the highest since April 2019.
[edit] Business expectations boosted by potential infrastructure work
Despite reporting subdued new business intakes since the start of the pandemic, construction companies reported an improvement in their business expectations for 2021. More than twice as many survey respondents (43%) expect to see a rise in construction output over the next 12 months as those that anticipate a fall (19%).
This optimism was linked to anticipated involvement in major infrastructure and public sector construction projects. However, this did not stop a decrease in staffing numbers. The rate of job losses slowed slightly compared to July 2020 but overall continued at the fastest pace over the past decade.
[edit] Related articles on Designing Buildings
- Business and Planning Bill 2019-21.
- Construction market forecast 2015 to 2024.
- Construction Purchasing Managers Index (PMI) survey results: May 2020.
- Coronavirus and the construction industry.
- New deal for infrastructure 2020.
- Procurement route.
- The future of the coronavirus furlough.
[edit] External resources
- IHS Market/CIPS, Construction sector growth slows in August.
Featured articles and news
Shading for housing, a design guide
A look back at embedding a new culture of shading.
The Architectural Technology Awards
The AT Awards 2025 are open for entries!
ECA Blueprint for Electrification
The 'mosaic of interconnected challenges' and how to deliver the UK’s Transition to Clean Power.
Grenfell Tower Principal Contractor Award notice
Tower repair and maintenance contractor announced as demolition contractor.
Passivhaus social homes benefit from heat pump service
Sixteen new homes designed and built to achieve Passivhaus constructed in Dumfries & Galloway.
CABE Publishes Results of 2025 Building Control Survey
Concern over lack of understanding of how roles have changed since the introduction of the BSA 2022.
British Architectural Sculpture 1851-1951
A rich heritage of decorative and figurative sculpture. Book review.
A programme to tackle the lack of diversity.
Independent Building Control review panel
Five members of the newly established, Grenfell Tower Inquiry recommended, panel appointed.
Welsh Recharging Electrical Skills Charter progresses
ECA progressing on the ‘asks’ of the Recharging Electrical Skills Charter at the Senedd in Wales.
A brief history from 1890s to 2020s.
CIOB and CORBON combine forces
To elevate professional standards in Nigeria’s construction industry.
Amendment to the GB Energy Bill welcomed by ECA
Move prevents nationally-owned energy company from investing in solar panels produced by modern slavery.
Gregor Harvie argues that AI is state-sanctioned theft of IP.
Experimental AI housing target help for councils
Experimental AI could help councils meet housing targets by digitising records.
BSRIA Occupant Wellbeing survey BOW
Occupant satisfaction and wellbeing tool inc. physical environment, indoor facilities, functionality and accessibility.