Rising orders drive building expansion

3 July 2005
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04 July 2005 | Gareth Mytton

A sharp rise in new orders spurred growth in all three areas of the UK construction sector, according to June's purchasing managers' index (PMI) report.

The overall PMI - a composite indicator of overall sector conditions, in which 50 indicates no change on the previous month - was 55.8, a 3.2-point rise on May's figure.

The commercial sector of the building trade was again the strongest performer, but civil engineering and housing companies both bounced back into growth after falls in activity in May.

More than a third of companies reported a monthly rise in new orders, creating the strongest growth in order books for seven months.

To meet the demand, builders took on more staff. They also increased their purchasing activity, at 55.6, although only 15.6 per cent of companies said input prices (which fell to 55.4) had risen.

And supplier delivery times shortened for the first time since March 1999, at 50.7.

Builders also made greater use of subcontractors (up to 52.3), although the rise in their rates eased.

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

SMjul2005

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