Optimism remains high for UK construction

4 October 2005
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05 October 2005 | Anusha Bradley

Construction activity remains robust and optimism about the future is high, according to the September CIPS/Royal Bank of Scotland purchasing managers index (PMI).

The overall PMI - a composite indicator in which an index above 50 indicates growth - registered 57.2, only slightly down from August's 16-month high of 57.4.

The future business activity index was up on the last month with a posting of 75.8, indicating a high level of confidence within the industry for the next year. August recorded a figure of 70.9.

In addition, the report said growth of new orders picked up to its strongest in 10 months, with the seasonally-adjusted new orders index registering 59.4.

The commercial sector continued to show the strongest performance, while the housing index and civil engineering indices rose only marginally on August and posted readings of 50.2 and 50.6 respectively.

Roy Ayliffe, director of professional practice at CIPS, said: "To meet increased demand, subcontractor usage was stepped-up and employment raised again.

"Optimism about the future remained high, as firms widely anticipated increased demand for projects over the next year."

However, the inflation rate of input prices accelerated to its sharpest in seven months. Nearly one third of firms said they experienced an increase in their average costs compared to August, mostly as a result of rising oil prices.

Despite this, 58 per cent of companies anticipated a rise in activity.

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

SMoct2005

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