Construction growth slows in January

3 February 2004
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03 February 2004 | Gareth Mytton

Activity in the UK construction industry grew strongly again in January, according to the latest PMI figures.

The headline purchasing managers' index (PMI) - a composite indicator of economic conditions compiled by CIPS and NTC Research - slipped to 56.3, from 59.2 in December, as companies reported delays between finishing previous contracts and starting work on new ones.

The housing sector was still the best performer and companies reported buoyant demand for new homes, although the index fell to 59.1. Commercial growth, at 56.1, was below the levels seen in the previous quarter, but civil engineering maintained December's index of 54.8.

Companies succeeded in winning more contracts, with the new orders index falling marginally to 59.6, thanks to buoyant demand.

Purchasing activity increased (52.5), but at the slowest rate for seven months owing to delays between finishing old work and starting on new sites. Input prices rose sharply, at 59.7. The price of timber fell, but rose for 17 other raw materials.

Longer suppliers' delivery times generally reflected commodity shortages, according to builders.

The need to meet growing demand led businesses to take on more staff, but at 52.1, the employment index was the lowest since last April. The usage of subcontractors' index fell to 51.5, but their rates rose and their quality and availability declined.

SMfeb2004

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