There has been a sustained recovery in UK construction output with new order volumes expanding at the quickest pace in six years.

The seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index was 54.7 in November, up from 53.1 in October. The index has been above 50 for the sixth consecutive month although the rate of growth remained softer than the peak seen in July.

House building was the best-performing area in November (59.2), followed by commercial work increasing marginally (51.9) with civil engineering returning to growth (52.3).

New business volumes expanded at a faster pace in November with the improvement in construction order books the steepest since October 2014. Survey respondents attributed this to a recovery in tender opportunities and improving confidence among clients.

There has been a rising demand for construction products and materials which has led to longer lead-times among vendors. In particular, there has been a sharp rise in timber prices plus transport delays and stock shortages.

Around 51 per cent of the survey panel forecast a rise in business activity during the year ahead, while only 16 per cent predict a decline. The index pointed to the strongest degree of business optimism across the construction sector since January.

IHS Markit economics director Tim Moore says: “UK construction output stayed on a recovery path in November and there were signs that the main growth driver has transitioned from catch-up work to new projects.

“The latest increase in new orders was the strongest since late-2014, with construction firms reporting a boost from rising client confidence and the release of budgets that had been held back earlier in the pandemic.”

Chartered Institute of Procurement & Supply group director Duncan Brock comments: “The energy behind this success was primarily the housing sector as sales remained buoyed by consumers rushing to meet the stamp duty relief deadline less than four months away and a rise in home improvement projects for locked down citizens.

“The below par performance of supply chains, overstretched by the bulk of this renewed demand held back further progress as lead times increased and shortages scuppered agile builders ready to get going again.”

National property consultancy and surveyors Naismiths director Gareth Belsham adds: “There are few better weathervanes for business confidence than construction. And on this evidence, the wind is blowing squarely in the right direction. Construction firms are busy now and new orders for 2021 are pouring in.

“Demand is exceeding supply for certain key materials, pushing up prices and adding to delivery times. But these are just speed bumps for a sector that has accelerated back to growth at a truly impressive pace since the first lockdown brought things to a juddering halt.

“This has been a rollercoaster year for construction, but it is ending 2020 as it began it – with a spring in its step.”