Housing activity fall fails to slow building boom

3 April 2005
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04 April 2005 | Gareth Mytton

Activity in the UK construction sector accelerated despite the first fall in housebuilding activity for more than six years, according to the latest purchasing managers' index (PMI).

The housing activity index, which has been falling since January, dropped below the 50 figure that indicates no change on the previous month, to 49.5, in the report compiled by CIPS and NTC Research.

But the overall PMI, a composite indicator of sector conditions, rose to 54.7, from 54.2 in February, on the back of increasing activity in the commercial (56.6, from 55.8) and civil engineering (54.1, from 52.6) sectors.

Builders used subcontractors more (53, up from 52.5 in February) and took on more staff.

Just over 29 per cent of builders also increased their quantities of purchases as they started work on new contracts. Input price inflation maintained its decline from last Spring's peak, as the index dropped below 60 for the first time since late 2003.

Although delivery times worsened again (47.4), the index was the highest for more than a year.

• Coverage of previous months' manufacturing, construction and services PMI reports is available at http://www.supplymanagement.com/pmi.


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