Construction sector grows but housing slows again

3 May 2005
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04 May 2005 | Gareth Mytton

UK builders beat another fall in housing activity as the construction sector enjoyed a slight increase in business, according to May's purchasing managers' index (PMI) report.

The total industry PMI - a composite indicator of overall sector conditions, in which 50 indicates no change on the previous month - was 54.8, a marginal rise on March.

Housebuilders blamed the second successive month of falling activity (at 48.9, down from 49.5) on slower sales and planning delays on new developments. Although the indices fell in both commercial and civil engineering sectors, they remained well above the critical 50 mark.

More than a third of companies said order books had grown since March. They met this with the sharpest rise in purchasing activity for three months, but nearly 90 per cent of respondents said suppliers' delivery times were constant.

Input price inflation was the lowest in almost two years, at 54.4.

Builders made the same use of subcontractors as in the previous month, as their rates showed the smallest rise in eight months.

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

SMmay2005

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