The rapid growth experienced by the UK construction industry in the first half of 2014 may have cooled somewhat, but one segment of the industry continues to outperform the rest of the sector: housebuilding. A new report by Markit/CIPS has detailed the performance of the UK construction industry in December 2014. It found that the sector had grown by its slowest rate since July 2013.
Housebuilding and commercial construction continue to perform strongly, while civil engineering output decreased in the last month of 2014. The survey also draws attention to skill shortages in the industry, culminating in a rapid increase in subcontractor pay – the second biggest increase since the survey first started in 1997. Falling oil prices helped to offset this inflation for construction companies.
Over half of survey respondents expected the UK’s construction sector to grow in 2015, with housebuilding cited as one of the biggest drivers of growth. Additionally, Tim Moore, senior economist of Markit, commented: ‘over the course of 2014, UK construction firms recorded the strongest calendar year of residential building since the survey began in 1997.’
Moore also noted the optimism in the industry, but warned that ‘supply chain shortages and deepening skill shortages were prevalent.’
While many businesses will benefit from cost deflation due to falling oil prices, the construction industry faces other cost drivers that could hold back production unless managed carefully. By making use of specialist construction accounting software, you can track your costs closely. Carry out CVR quickly and easily and check how costs relate to your initial budgets. Book a free demonstration to see how construction software can improve your business.