Construction in strongest growth since 2007

Grant Prior 13 years ago
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Construction activity in April grew at its strongest rate since September 2007 as house building and commercial work continue to push the industry towards recovery.

The second successive month of growth was highlighted in the Markit/CIPS Construction Purchasing Managers’ Index survey which also showed civil engineering work contracting at its slowest rate for 23 months.

Hopes of a private-sector led recovery were also voiced by consultant WSP in a Stock Exchange statement today which said: “In the UK we have seen early signs of increased activity in the private sector and we wait to see if this continues.”

The Markit survey revealed that construction employment is still falling as firms recorded their 23rd successive month of job cutting.

The use of subcontractors also fell during April but at the slowest rate since February 2008.

Sarah Ledger, economist at Markit said: “Growth of the UK construction sector was sustained for a second consecutive month in April, with increased activity in both the residential and commercial construction sub-sectors arising from improved new contract wins.

“However, reflective of the impact of the twenty-four month recession in the industry, employment is yet to rise. Nonetheless, optimism over future business prospects continued to improve, despite sustained concerns over potential cuts in government spending.

“This suggests that growth in private business may help to offset any impending weaknesses in public sector demand.”

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “It’s encouraging to see the construction sector show signs of recuperation for the second month running and suggests that the whole UK economic recovery has real substance.

“Though the industry is moving in the right direction, we mustn’t be lulled into complacency as growth is coming from a very low base and operating conditions are still very difficult.

“While purchasing managers noted a growing appetite for new contracts – especially in the housing and commercial sub-sectors, civil engineering is still a sore spot with little activity.

“Looking forward during election week, it’s a worry considering what impact post-election spending cuts and rising input-price inflation might have on the sustainability of the sector’s recovery.

“More worrying still – we are yet to turn the corner and see an end to the 23 months of relentless job cuts.”

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