Rapid Growth of Housing Market Accelerates, Restoring Optimism to 2007 Levels Across The Construction Sector
Both house prices and the number of new homes being built continue a steady growth curve. The numbers supporting this growth – unemployment down to 6.8%, record low interest rates, £12 billion in government funding for homebuyers through the Help to Buy scheme – are strong, and encouraging.
The Markit/CIPS Construction Purchasing Managers’ Index (PMI) is a key indicator of the overall strength of the construction industry. It is a survey of 170 construction firms, with any monthly score above 50 indicating growth, optimism and confidence. In March it was 62.5, the highest in seven years. This is the eleventh straight month where the PMI index has been above 50.
Construction, which includes residential, commercial and civil engineering, accounts for 7 percent of the countries GDP. According to government figures as of October 2013, the sector employs nearly 900,000 people. A figure which is on the rise, now that winter is turning into spring. Hiring is taking place at the fastest pace in four months, with this breakneck growth, placing strain on suppliers across the spectrum.
In London there is long waiting lists for cranes, up to six months. Subcontractor availability has dropped dramatically. The delivery of construction materials has the longest lead time since the PMI survey started in 1997. This is all in part due to the massive downscaling the sector has undergone the last few years. Now everyone is playing catch up.
House prices have cooled recently, which isn’t a bad thing, with some speculating that we were entering a new bubble. As of November 2013 the Bank of England confirmed that mortgage approval rates were at a new five-year high. Alongside the positive signs in the housing market and residential construction, there has been a marked increase in civil engineering spending.
Tim Moore, senior economist at Markit and author of the PMI survey, said:
“Construction output growth succumbed somewhat to the recent wet weather, with temporary disruptions from heavy rainfall, most acute for house building activity in February. Consequently, residential work ceded its place as the best performing category to civil engineering, as construction work related to flood relief and infrastructure maintenance rose sharply over the month.”
We at Hi-Tech Steel Services have benefitted from this growth in the housing market, both at home and abroad, especially in the the steel framed building sector.
Our expertise in the supply of structural grade slit coil along with our traditional tie in with the modular machine manufacturers themselves, has seen us win numerous new contracts. This has seen new and existing clients signing up for our bespoke consignment stock system to help control their steel requirements, with more pending.
As a company, we feel this sector has great potential for us, therefore we have put in place stock to cover any new enquiries / orders we receive from both existing and potential new customers.
As well as carrying various bespoke grades and thicknesses, our current ex stock range held for the steel framed building market includes:
S350 G275 – 0.9mm, 1.0mm, 1.2mm, 1.5mm
S390 G275 – 0.9mm, 1.0mm, 1.2mm, 1.5mm
Contact us to see how we can help meet the demands of your construction needs.