Construction bounces-back to growth in January

Grant Prior 12 years ago
Share

Construction returned to growth in January following disastrous figures for December which raised the fears of a double-dip recession in the industry.

Latest figures from purchasing professionals in the Markit/CIPS UK Construction PMI index show a figure for last month of 53.7 where anything above 50 represents growth.

The numbers are a marked improvement on December which saw the index slump to 49.1 as the industry contracted.

Chris Williamson, Chief Economist at Markit said: “The UK construction sector showed a welcome bounce-back from the snow-related drop in activity late last year.

“However, after estimating for the boost to activity in January resulting from the disruption to workflows in December, the underlying growth trend remains only very modest and well below the surging pace seen in the second quarter of last year.

“Looking at the trend in recent months, the housing market seems to be a particular area of weakness, with house building stagnating at best.

“Civil engineering has seen only very modest growth, leaving commercial activity as the only sector recording any noteworthy expansion, albeit well below that seen last spring.

“The outlook appears to be one of nervous optimism. Confidence over future business prospects was at its strongest in eight months, but this still remained relatively subdued compared to the long-run average.

“This nervousness about future prospects was highlighted by a disappointing further reduction in employment.”

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “This is good news for the Government as the construction sector seems to have bounced back, suggesting it was the widespread chaos caused by the snow, that had such an impact and hampered growth in December.

“Despite the growth of activity, an air of caution persists amongst construction companies as employment levels continue to fall.

“Some companies that are doing well are hiring but many more companies are continuing to adjust to lower workloads and deferral of projects. Until growth becomes sustained it is unlikely we will see employment levels rise substantially and consistently.

“At the moment it is hard to tell what 2011 holds for the sector, even though confidence about future activity has risen, it is still weak and many are pinning their hopes on general economic improvements to make that confidence a reality.

“Furthermore, the rise in raw material prices as well as the latest VAT hike will add to the worries for the sector. Bearing this in mind we may be looking at another disappointing year with continued uncertainty where hopes are dashed.”

Latest news

Andy Milner to return as chief executive of Amey

Milner to return to his old CEO role which he previously held for four years
15 hours ago

Green light for UK’s first carbon capture power station

Keadby 3 gas power station and carbon capture to see £2.1bn investment in North Lincolnshire
21 hours ago

Unite passes union hotel job probe findings to police

Independent reports raise concerns of ‘potential criminality’ around union's £100m hotel and conference centre
1 day ago

Berkeley to slow down investment as sales rates fall

Housing giant to focus on matching construction to demand on existing sites
21 hours ago

Competition concerns about rail signalling takeover

Hitachi’s purchase of Thales’ rail infrastructure could lead to higher fares in future, the CMA has found.
20 hours ago

Plans lodged for Manchester student tower and offices

Plans lodged for £250m One Medlock Street mixed-use office and student scheme
1 day ago

Glasgow civil engineer banned for £100k Bounce Back Loan abuse

Sole director handed 11-year ban for falsely claiming two loans for personal gain
1 day ago

Plans go in for 250,000 sq ft York mixed-use scheme

Local developer pushes ahead with regeneration project in heart of the city
22 hours ago

McLaren tops November contracts league

Excel exhibition centre £200m phase 3 wins lifts McLaren to pole position for contract wins last month
2 days ago

Former Wates CEO joins Mace as new financial chief

David Allen replaces Richard Bienfait who stepped down in September
2 days ago

M25 to go green under new Shell and Balfour deal

New trial of paving on UK's busiest motorway
2 days ago

Bidders wanted for £125m painting and decorating framework

Apply now for latest Fusion21 deal
2 days ago

Robertson wins first MIM-funded Welsh school job

£65m Flintshire school campus project first to use Welsh mutual investment model
2 days ago

Willmott Dixon wins £130m Broadwater Farm estate revamp

Green light for north London estate transformation
2 days ago

Materials giant CRH looks to sell contractor Farrans

More than 550 staff set to get new owner
4 days ago

West Yorkshire transport projects delayed to save £270m

Over 30 transport schemes to be placed on hold due to cost inflation budget pressure
3 days ago

Decision on A1 Costain dualling job delayed for third time

Development consent decision for £260m Northumberland scheme put back a further 9 months
3 days ago

Colas wins £140m Cheshire highways upkeep deal

Incumbent contractor Ringway will handover to Colas in April
3 days ago

Skanska to lend staff cash

Contractor links-up with finance firm to offer affordable loans to employees
3 days ago

Ilke Homes pulls off £100m record-breaking fund raise

Largest-ever capital raise by a UK modular house builder to fund expansion
4 days ago

Construction buyers fear for year ahead

"Construction companies now have a tightrope to walk in terms of being ready for recovery and cautious around investment"
4 days ago

Gove calls for competition probe into house building

Levelling Up and Regeneration Bill 'strengthened' with new measures
4 days ago

Schools get £500m for energy upgrades this winter

Extra cash found for better heating controls, insulation and energy efficient lighting
4 days ago

1,000-home North London scheme approved

Developer Hill will start work in the Spring on South Tottenham site
4 days ago

Bid race for £500m Suffolk construction framework

Construction and building services firms called up for East of England four year deal
4 days ago

Mace employs robot dog to avoid slip and trips in tunnel

Robot working in dark and hazardous conditions under Heathrow Airport
4 days ago

Administrator details confirmed at Southampton M&E firm

Begbies Traynor now in charge at Working Environments as suppliers face large losses
5 days ago

Former Galliard chief takes helm at Inland Homes

New CEO Don O'Sullivan sets out to return south east house builder to profitability
4 days ago

Applicant numbers nosedive for construction vacancies

Recruitment market gets even more competitive - how the Enquirer can help
5 days ago

Industry veteran to head Henry Bros northern arm

Peter Commins, former Kier and Balfour Beatty northern chief, to spearhead growth drive
4 days ago

Contractor services