Buyers report rising workloads

Grant Prior 10 years ago

Construction continued to grow in November thanks to a rise in residential work according to the latest survey of industry buyers.

The Markit/CIPS UK Construction PMI index for November hit 53.3 where anything above represents growth.

The figure was a slight fall on October’s five-month high of 53.9.

Sarah Bingham, Economist at Markit and author of the UK Construction PMI said: “UK construction output rose again in November, supported by an increase in new business wins.

“The rate of expansion slowed since October and was only modest, highlighting the wider economic headwinds currently facing the sector, but the ongoing expansion suggests that the sector may provide a positive contribution to economic growth in the fourth quarter.

“Residential construction returned to growth, ending a five-month sequence of decline. This followed data released from the Bank of England showing that mortgage approvals for house purchases were at their highest in October since December 2009.

“However, the increase in commercial output weakened, and work on civil engineering projects was little changed on October.

“The outlook for the sector remains challenging, with confidence over future activity levels still subdued.

“Construction companies’ main concern is that wider economic uncertainty will impact negatively on clients’ spending decisions. It will be interesting to see if the government’s infrastructure plans, announced in the Autumn Statement, will lift construction industry confidence from its current low level.”

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “This month saw a slow but steady rise in activity for the UK construction sector.

“While growth was slower than October, construction companies are reporting a rise in new contract wins, which suggests an increased willingness to invest in new projects, a reason for optimism.

“It is great to see that the positives are also filtering through to employment with the rate of job creation in November at its fastest in over three-and-a-half years.

“The rise in activity within the housing sector is particularly progressive, but as this growth is coming from such a low base it doesn’t herald the start of a new dawn.

“Furthermore, construction companies remain cautious about the next few months and highlight the lack of government spending as a particular threat to future business activity.

“Raw materials, energy and fuel prices continue to hinder the sector, construction companies cite these as the main contributing factors for high input prices which have increased for the twenty-second month running.”

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