Construction records highest growth for eight months

Grant Prior 14 years ago
Share

Construction continued its recovery in February with latest figures from purchasing professionals showing output rising at the fastest rate for eight months.

The numbers surprised City analysts who were expecting a dip following January’s strong bounce back from December’s disastrous figures.

Compilers of the Markit/CIPS UK Construction PMI index believe that official Government figures for construction output will return to growth during the first quarter after contracting 2.5% in the final three months of 2010.

The latest report shows an index of 56.5 for February up from 53.7 in January where anything above 50 represents growth.

Sarah Ledger, Economist at Markit and author of the UK Construction PMI said: “February’s survey showed continued recovery in the UK construction sector following December’s weather-related decline in activity, with output rising at the fastest rate in eight months on the back of
strengthening growth of new business.

“The latest figures therefore suggest that, having contracted by -2.5% in the final quarter of last year, the ONS measure of construction output should bounce-back into positive territory in Q1.

“Demand and supply side pressures continue to push up purchase prices, with construction costs rising at the fastest rate since August 2008 and delivery delays the worst for over three years. Concerns about rising costs and fears over cuts in public spending meant future business optimism remained subdued and well below the long-run average.”

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “A weather-beaten UK Construction sector is showing signs of repair, with stronger rates of activity and a rise in new business continuing the reversal of fortune since the end of 2010.

“However, this new phase of recovery is at least in part built on shifting sands.

“Overall, reports about new tenders becoming available and projects being confirmed will be a relief to firms which have suffered the consequences of a subdued market.

The residential sector in particular appeared revitalised compared to recent months, with house building registering the fastest increase in activity since June 2010.

“As for manufacturing, the construction sector is suffering from higher input prices which increased considerably during February.

“53% of panellists indicated a rise in costs since January. Companies who have carefully managed costs may be in a better position to deal with this and the likely further aggravations caused by the unrest in the Middle East.

“The situation is still fragile, however, considering the likely impact of government cuts. Concern about the level of bank lending is also having a negative impact on confidence. This is echoed by a further reduction in employment.”

Latest news

Winners named for £2.6bn NHS SBS Modular 3 framework

Twenty-seven secure spots on health, education and resi framework
2 days ago

Leeds kicks off homes vision for Elland Road regeneration

Council plans to deliver 2,000 homes around United’s revamped stadium
2 days ago

Britcon targets £70m turnover after string of framework wins

Major AMP8 win and regional expansion fuel contractor’s biggest growth push yet
3 days ago

Go-ahead for 37-storey tower at Leeds Merrion Centre

Town Centre Securities to deliver over 1,000 student rooms
3 days ago

Taylor Wimpey fined £800k after apprentice falls down stairwell

Teenage brickie injured after falling with pile of concrete blocks
3 days ago

Green light for life sciences buildings in campus expansion

Construction to start this year on Wellcome Genome Campus in South Cambridgeshire
3 days ago

Morgan Sindall scores £63m twin wins on flagship leisure projects

£36m Southampton and £27m Bishop Auckland jobs get underway
3 days ago

Hill and L&G partner on £450m Coventry city centre revamp

Partners to deliver opening phase of 991-home City Centre South scheme
3 days ago

Graham snaps up sector veteran to lead office fit-outs

Peter Allan most recently held director roles at ISG and Overbury
3 days ago

Construction growth of 0.9% bucks wider shrinking economy

Construction output climbs for third straight month
4 days ago

Crest Nicholson returns to profit

House builder back in the black after huge fire safety provisions last year
4 days ago

JN Bentley profit surges as revenue tops £500m

Surging water work and plant investment underpin £19m profit
4 days ago

Willmott Dixon bags £49m East London business school job

Builder secures second job in a year for Queen Mary University
4 days ago

Another extension for competition probe into house builders

Spotlight will stay on seven housing giants for another few months
4 days ago

Strike ballot for 1,500 Sellafield construction workers

36 contractors working on nuclear clean-up could be hit
4 days ago

WSP to buy Ricardo

Consulting giant to add another 2,700 staff
5 days ago

Infrastructure and major projects boost profits at Vp

Specialist construction, water and transmission sectors are star performers
4 days ago

TClarke jumps to top of M&E firms rankings

Growth in data centres and commercial refits creates optimism for year ahead
5 days ago

JRL plans Sutton 12-storey office to co-living revamp

St Nicholas House to be stripped back and reworked into high-rise homes
5 days ago

Plan to double affordable homes spend at centre of spending review

£39bn will be injected into social housing over 10-years
5 days ago

Lindum lands £44m automation centre contract

Construction to start this summer on Sutton-in-Ashfield site
5 days ago

Esh seals £160m sewer repairs deal with Northumbrian Water

Eight-year deal caps 25-year partnership with Northumbrian
5 days ago

Rolls-Royce wins race to build UK’s first small modular reactor

BAM Nuttall, Laing O’Rourke and Atkins are supporting Rolls-Royce-led consortium
5 days ago

Plans in for £100m Digbeth regeneration scheme

Developer Hartwell plans mixed-use project at former ironworks site
5 days ago

Founder retakes the reins in Reds10 leadership shake-up

Chief exec steps aside as founder returns to steer growth push
6 days ago

Sizewell C powers up as Government commits £14bn funding

Around 70% of contracts for 3,500 British suppliers as construction to gear up
6 days ago

Plans in for 3,000-capacity TraffordCity ice arena

Second ice rink for Trafford as Peel pushes leisure-led regeneration
6 days ago

Walker Modular wins pods deal at £90m Greystar site

Latest package win with McAleer & Rushe on Birmingham student tower
6 days ago

Pre-pack deal rescues online building materials firm

Lords acquires £71m-turnover CMO from administrators for £1.8m
6 days ago

Russell WBHO lands £25m Oldham industrial deal

Next phase of scheme will deliver 13 distribution and manufacturing units
6 days ago

Contractor services