Increased construction output in March is welcome but needs to be sustained with a long-term National Retrofit Strategy to green our homes if the Government is to hit its climate change targets, says the Federation of Master Builders (FMB) in response to the latest construction PMI data.

The recovery in UK construction output gained considerable momentum in March, supported by robust rises in house building, commercial work and civil engineering. Adjusted for seasonal influences, the IHS Markit/CIPS UK Construction Total Activity Index registered 61.7 in March, up sharply from 53.3 in February.

The latest reading signalled the strongest rate of construction output growth since September 2014. Housebuilding (index at 64.0) was the best-performing category, with growth the fastest since July 2020. Strong increases in activity were also seen in commercial construction (62.7) and civil engineering (58.0) in March, with the index readings for both segments the highest since the second half of 2014.

Imbalanced demand and supply for construction inputs led to the steepest increase in purchasing prices since August 2008. Survey respondents widely noted that suppliers had cited Brexit and COVID-19 as reasons for price hikes in March.

Meanwhile, the latest survey indicated a strong degree of confidence towards the year ahead outlook for construction activity. Growth projections were the most upbeat since June 2015, reflecting confidence in the UK economic outlook, the improving pandemic situation and pent up demand. 

Brian Berry, Chief Executive of the FMB, said: “It’s welcome news to see construction activity recovering in March after a particularly difficult winter for many local builders. Unfortunately, the premature closure of the Green Homes Grant Scheme last month has left many small builders in the repair, maintenance and improvement sector out of pocket.

“If the Government is serious about achieving net zero carbon emissions by 2050, a long-term National Retrofit Strategy is needed that can support builders to install green measures at the scale and pace required, while also stimulating local economies and creating jobs.

“The construction skills shortage must be addressed if we are to build back better and greener. Training 71% of construction apprentices, local builders are key to this effort but the Government must bring forward their proposals for local skills plans and college business centres, so that builders are supported to train.”

-> Construction output expands at sharpest pace since September 2014