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Construction contractors could benefit from UK business confidence

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Contractors working in the construction industry will be happy to hear that confidence in the sector has reached its highest level in seven years.

Findings from the latest Markit/CIPS UK Construction Purchasing Managers’ Index (PMI), has shown that March data signalled a strong overall performance for the sector, with sharp rises in activity and employment maintained during the latest survey period.

Housing activity regained its place as the best performing category of construction in March, driven by improving underlying demand across the sub-sector.  The upturn in residential construction growth partly reflected a rebound in output following some weather-related disruptions in the previous month.

The UK Construction PMI also found that increased staffing levels were partly linked to improving confidence about the outlook for construction activity over the next 12 months. The degree of positive sentiment was the highest since January 2007, with around 59% of the 170 construction companies surveyed anticipating a rise over the year ahead and only 5% forecasting a reduction.

Commenting on the report, David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said, “Confidence in construction is soaring thanks to the budget boost and dissipating impact of the floods in a ringing endorsement the recovery will continue. Optimism is at its highest level since January 2007, complemented by an 11th consecutive month of increased activity. This is reflected in employment too where the sector maintained expansion and grew at its fastest pace in 4 months.

“As the rain gave way to sun, the housing market reclaimed its spot as the star performer. Commercial activity continued to rise strongly, benefitting from the positive business conditions. By contrast, civil engineering activity slowed somewhat, perhaps not that surprising following last month’s stellar figures.

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI, added, “Expectations for construction growth over the year ahead have now reached their highest since the start of 2007, and a strong pipeline of new work is fuelling job creation across the sector.”

What expenses can you claim as a contractor? Read our comprehensive contractors guide to company expenses for information on what you can claim, how expenses affect your tax bill and what is classed as a valid business expense.

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