Andrew Hajduk
UK Business News, 02 February 2012


The Markit/CIPS UK construction PMI shows that growth of activity in the sector has slowed to a moderate pace.  The seasonally adjusted Markit/CIPS Construction Purchasing Managers Index posted 51.4 in January, down from 53.2 in December.

The survey shows that January signalled a thirteenth successive monthly rise in construction sector output.  The rate of expansion, however, was modest while employment stagnated. 

The weaker increase in activity was led by a slowdown in new order growth.  Some panellists also noted the completion of existing contracts.

Two of the three broad construction categories monitored by the survey (housing and civil engineering) showed decreases in output in January.  The rates of decline were marginal, and broadly similar in both of the sectors. 

New business continued to rise during January, however the rate of growth was its weakest in the current four month period of increase. 

Despite this, the survey shows that confidence regarding future business activity strengthened.

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, commented:

“Buoyed by an increase in commercial activity, the continued growth in the construction sector in January was tempered by declines in housing and civil engineering.  This resulted in a slower rate of expansion overall.

“It’s clear that many businesses have replenished their levels of optimism and have high expectations for improving economic conditions and new contracts. This confidence bodes well for the year ahead, although this visibility over potential new business will need to convert quickly into tangible work if employment levels are to improve.

“Input prices continue to rise, however the easing rate of inflation has improved the operating environment.  As a result, we are seeing increased purchasing activity as companies attempt to fulfil new orders in these more favourable conditions.”

View the full Markit/CIPS report

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