U.K. construction output grows strongly in November, IHS construction index rises to 53.4

The U.K. construction output have grown strongly, according to the IHS November data. The solid growth was underpinned by a widespread rise in the three sub-categories of activity monitored by the survey. The seasonally adjusted IHS Markit UK Construction Total Activity Index rose to 53.4 in the month from 53.2 in October.

The latest reading hinted at the strongest pace of business activity growth since July. Residential building reclaimed its position as the most rapid growing area of construction work in November. The latest rise in house building activity was the strongest for three months. Latest data also indicated towards sustained rises in commercial work and civil engineering activity.

Survey respondents noted that increasing client demand continued to stimulate construction output in November. The pace of new business growth rebounded since October; however, it stayed weaker than seen on average in the third quarter of this year. Some construction companies noted that Brexit uncertainty had held back new order growth, while there were also reports citing delays to public sector spending decisions.

Increased levels of new business added to a strong growth of input purchasing and rising employment numbers in November. The latest rise in staffing levels was the most rapid since December 2015. In the meantime, greater demand for construction products and materials added to worsening vendor performance. Longer delivery times from suppliers have been reported in each month since September 2010.

Rising demand for construction inputs led to another surge in input prices in November. Survey respondents also commented on increased transportation costs and rising staff salaries. The overall rate of input price inflation was the most rapid since June. In the meantime, latest data indicated that business optimism throughout the construction sector rebounded from the almost six-year low seen in October. The latest reading hinted at the most solid degree of sentiment for three months. Anecdotal evidence implied that Brexit-related worries continued to be the main factor being a drag on business optimism in November.

At 14:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral at -105.182, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -34.243. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex