Construction growth rate hits 11-month high

Grant Prior 11 years ago
Share

Construction buyers reported their highest growth rate in nearly a year last month as confidence in future prospects also continued to rise.

Latest figures from the Markit/CIPS Construction Purchasing Managers’ Index show construction output rose in February for the 14th month in succession.

The index jumped to 54.3 from 51.4 in January where anything above 50 represents an increase in output.

The figure puts the index at its highest reading since March 2011.

But the survey of buyers sentiment is add odds with the latest orders figures for the last quarter of 2011, which show new work falling to a 30-year low.

New construction orders last year fell 14% compared to 2010, and dropped to the lowest level since 1980, with the largest decreases being in other public new work (35%) and public new housing (28%).

Infrastructure orders rocketed 42% in the fourth quarter of 2011 compared to the preceding three months, while new public housing plummeted 27%.

Overall last quarter construction orders fell slightly by 2.5% compared to the preceding three months, according to the Government’s number crunchers.

Simon Rawlinson, Head of Strategic Research and Insight at built asset consultancy EC Harris, said: “The PMI index does not appear to be picking up the significant downturn in public sector work reported in output and new orders data.

“Encouragingly for industry, the level of input inflation reported is at the lowest level for two years – this will reduce pressure on the supply chain, when in our opinion there is limited opportunity for price inflation over the next 12 months.”

“Overall sparkling infrastructure orders figures mask a significant decline in other sources of workload, ” he added.
“Resource pressure in the infrastructure sectors could be building while workload for the squeezed middle in public sector and commercial worlds face further challenges.”

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “The construction sector’s relatively buoyant start to 2012 continued in February, as sustained growth affirmed the industry’s ongoing recovery from the financial crisis in 2008.

“However, the increase in new work from sizeable contracts was tempered by the moderate dip in overall employment.

“This has not dampened confidence, however, which is at the second highest level seen in 21 months owing to greater visibility of contracts down the pipeline.

“Commercial construction remains the star performer but housing continues to be subdued.

“This is symptomatic of weak demand that has been prevalent in the market. This week’s Bank of England mortgage lending figures, however, bode well for better housing performance ahead.”

Sarah Bingham, Economist at Markit and author of the UK Construction PMI said: “The slowdown in UK construction sector output growth recorded in January was reversed in February, with a solid increase in activity indicated.

“This was despite potential headwinds caused by poor weather conditions. The rise in output was supported by a stronger commercial expansion. Residential construction and civil engineering activity also increased, rebounding from contractions last month.

“Perhaps more encouraging was the sharp increase in new business received, which should keep firms busy in the coming months.

“Reports of rising tender opportunities and greater visibility over potential new work flows also helped to boost confidence about the year ahead, which rose to a nine-month high.

“The improved performance of the construction sector adds to other positive data released on the UK economy.

“However, it remains to be seen whether GDP growth for the first quarter will be recorded and, if it is, any expansion is likely to be only modest as general economic conditions remain fragile.”

Latest news

Developer dumps Henry Construction from London tower job

Growing list of subcontractors and suppliers complain they have not been paid
2 days ago

HS2 construction shake-up sees main contractor changes

Align to take over responsibility for parts of the route previously under the control of EKFB
2 days ago

Claritas Group heading for liquidation

CEO of £50m turnover contractor confirms news and thanks staff and suppliers
2 days ago

Go-ahead for clutch of major jobs to reboot Manchester

Two biggest high rise projects at Bridge Street and Medlock Street to cost £575m to build
2 days ago

Plan for major NHS estate green upgrade framework

NHS Shared Business Services starts early consultation with firms on decarbonisation retrofit plan
2 days ago

Willmott Dixon signs £34m revamp of DfE headquarters

Grade II Sanctuary Buildings in Victoria will be modernised and made energy efficient
2 days ago

£500m southern highways framework up for renewal

Ten firms face fight to retain places on major councils roads framework
3 days ago

Engineering losses halve Briggs & Forrester profit

Main engineering services arm suffers £1.6m loss
3 days ago

Plans in for University of East London campus expansion

Work to start in early 2024 on 280,000 sq ft Stratford teaching and student rooms scheme
3 days ago

CITB told to improve by Ofsted inspectors

Number of in-house apprentices drops as training body changes business model
3 days ago

IHP wins £100m Derbyshire mental health projects

Vinci/McAlpine JV will build two 54-bed Adult Acute Care units
3 days ago

Align hits key milestone on HS2 Colne Valley viaduct

Engineers rise to the challenge to complete first V-piers in lakes
3 days ago

£9.3bn race starts for National Grid construction partners

Plan for Great Grid Upgrade Partnership to be set out at bidders day in early June
4 days ago

Plan approved to redevelop major Glasgow shopping mall

Outline plan backed for demolition of St Enoch centre for over 900 homes, shops and leisure space
4 days ago

Banned demolition boss wins appeal to remain a director

Paul Cluskey wins Court appeal to remain director of Cantillon but steps down as MD
4 days ago

B&K confirms £140m Leeds build to rent project

Work to start on Whitehall Riverside twin blocks for client Glenbrook
4 days ago

McLaren Property to revamp Liverpool roller skating site

242-bed student scheme unveiled for sensitive site
4 days ago

Wates names Midlands construction chief

Matt Johnson promoted after just 10 months at family-owned builder
5 days ago

Glencar lands £28m Peel Ports Liverpool shed job

240,000 sq ft Alexandra Docks warehouse will be five football pitches long
5 days ago

Private equity giant buys United Living

US based investment group Apollo makes latest swoop on UK construction market
5 days ago

Quartet secure Thirteen Group £500m new homes deal

Esh, Morris & Spottiswood, ReGen and Henry Boot secure spots on new build framework
5 days ago

Luton Town FC to start new stadium before end of 2023

Talks already underway with contractors ahead of submission for detailed planning this summer
5 days ago

Plans for renovation of historic Cardiff Market

Subject to planning and final funding work could start next year
5 days ago

£53m race to cut Magnox reactor buildings down to size

Trawsfynydd reactor buildings to be reduced in height by a third
5 days ago

Cyclist dies in lorry collision outside Keltbray site

Work shut down after fatal collision with truck delivering to central London site
1 week ago

Another demolition director banned after bid rigging probe

Brown and Mason boss becomes fourth director disqualified after cartel investigation
1 week ago

Five hospitals at risk of collapse added to new build programme

Weak concrete crisis and soaring costs force £20bn hospital programme rethink
1 week ago

Scottish South West Hub names new partners

Balfour Beatty joins construction partners for first time
1 week ago

RC frame specialist Getjar revenue tops £100m again

Profit margins nearly halved in face of labour and material price rises
1 week ago

London’s Camden Council advances £470m King’s Cross scheme

Camley Street scheme to consist of 350 homes and 200,000 sq ft of offices
1 week ago

Contractor services