11 April 2002 | Robin Parker
Strong public-sector investment has given new impetus to growth in the construction industry, the latest economic figures indicate.
The civil engineering sector was busier than housing and commercial building in March for the first time since August 2000, according to the construction purchasing managers' index from CIPS and NTC Research.
The civil engineering activity index rose to 57.4, its fastest growth since last June and significantly above the 50 mark that indicates no change. The sector, which includes rail, schools and hospital work, depends heavily on government spending, which reached £1.9 billion in January and February.
A third of firms reported growing private-sector activity.
The growth was mirrored by the strongest optimism for future activity among purchasers for more than four years, with confidence boosted by the prospect of more new public and private-sector contracts.
Richard Harding, an economist at NTC, expressed surprise, as civil engineering is usually carried along by stronger activity in the other sectors.
"Many public-sector contracts appear to be getting off the ground before the end of the financial year," he said.
"Activity has increased sharply since January, and it'll be interesting to see if this continues."
But prices rose at the quickest rate in 10 months, with an index of 61.3. Harding warned that prices could rise further if inflation is hit by rising oil prices, which have reached a six-month high amid escalating tensions in the Middle East.
The manufacturing index also showed further signs of a recovery, reaching its highest level for a year after three months of consecutive growth. But many purchasers were still cautious about the strength of the economic recovery and met new orders from existing stocks.