Positive outlook for UK construction sector

2 December 2005
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02 December 2005

Demand from the commercial sector helped secure a solid rise in UK construction work in November.

The latest CIPS Purchasing Managers' (PMI) Index - in which a number above 50 indicates growth -edged up to 54.2, from October's five-month low of 53.9.

While house building and civil engineering sectors recorded falls, expansion in the commercial sector boosted overall growth of the construction economy.

UK construction firms have received an increased number of new orders for the past seven years, with the new orders index posting 58.4 for November.

In order to handle increased workloads, construction firms took on more staff. They also made more use of subcontractors; however the quality of their work was deemed to have further deteriorated.

Results show construction firms are positive about the future, with 60 per cent forecasting they will have a higher workload in a year's time. The future business activity index came in at 75.1.

As a result of increased activity, more building materials were purchased in November. This tested the capacity of suppliers and led to some delays in delivery of stock. The suppliers' delivery times index posted a reading of 48.7.

Average input prices faced by construction firms remained steep in November, with high cost of fuel cited as the main reason.



SMdec2005

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