• Prior 54.3

After a more subdued period towards the end of last year, the UK construction sector is seen gaining momentum as commercial activity surged to a six-month high and helping to offset a weaker rise in house building. Adding to the positives is that it appears that the peak phase of supply chain difficulties has passed. Markit notes that:

"UK construction companies started the year on a strong footing as business activity picked up speed and new orders expanded to the greatest extent since last August. The composition of growth has become more tilted towards commercial projects as house building lost momentum and civil engineering remained subdued.

"Commercial construction activity benefited from fewer concerns about the Omicron variant and strong business optimism about recovery prospects over the course of 2022.

"Residential work increased at one of the slowest rates since spring 2020, which is an early sign that cost of living concerns and rising interest rates could start to dampen the post-lockdown surge in spending.

"Higher energy, transport and raw material bills led to across the board increases in input prices during January, but fewer supply issues helped ease the overall rate of cost inflation to its lowest since March 2021."