UK construction firms face sharpest rise in costs in nearly 30 years

Construction companies in the UK are experiencing some of the sharpest cost rises in nearly 30 years as the war in Iran drives up prices for fuel and raw materials, according to a closely watched survey. The poll of UK construction companies found that input cost inflation – which accounts for expenses such as raw materials, energy and labour – rose last month to the highest level since June 2022 when there was a spike in commodity prices caused by Russia’s invasion of Ukraine. April’s jump in purchasing prices was also one of the steepest since the survey began in 1997. The monthly purchasing managers’ index (PMI) for construction activity, considered one of the best indicators of growth in the sector, fell to 39.7 in April, the lowest level since last November and down from 45.6 in March. Readings above 50 represent growth and anything below a contraction. The index had not shown growth since January last year. Construction is one of the largest sectors of the UK economy, making up about 7% of GDP and employing more than two million people. A key promise of the Labour government had been to “get Britain building again” with a focus on boosting infrastructure projects and building 1.5m more homes by 2030 . However, the sector has been struggling with subdued demand, an ageing workforce and higher costs over the past two years. The conflict in the Middle East is further weighing on the industry by causing increased business uncertainty and higher costs. …