Output growth in the UK construction sector rebounded further in February from December’s 17-month low, the UK’s Chartered Institute of Purchasing and Supply (CIPS) says. The institute was commenting on the findings of its monthly CIPS/Markit purchasing managers’ index (PMI) survey of the UK construction sector monitored by Kallanish.

UK construction companies indicated a further acceleration in output growth during February, driven by the fastest increase in new orders for four months. Strong demand for construction materials, alongside ongoing shortages of stock at suppliers, contributed a steep and accelerated rise in input prices, CIPS says.

Adjusted for seasonal influences, the Markit/CIPS UK Construction PMI registered 60.1 in February, up from 59.1 in January and above the neutral 50.0 threshold for the twenty-second successive month. Steel-intensive commercial and civil engineering activity both increased at steeper rates in February.

Supply chain pressures are very much in evidence resulting in longer delivery times and increasing prices. “Generally worldwide, commodity prices have been falling, but the sector is experiencing strong demand for quality materials and so supply continues to be challenging” CIPS says.

The UK construction sector continues to have some steel quality concerns. British producers association UK Steel last week highlighted potential quality issues with China-origin structural steel (see Kallanish 4 March). This followed further similar issues raised by the association concerning rebar in summer 2014. There is also some disquiet within the UK longs sector about the possible sale of Tata Steel’s long product division this year, Kallanish learns from market sources. Tata is now the UK’s only structural steel manufacturer.