New orders boost UK construction

2 March 2007
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02 March 2007 | Antony Barton

Robust growth of new orders led to an increase in construction activity last month, according to the CIPS Purchasing Managers' Index.

Yet the index, where a reading above 50 indicates growth, revealed the increase was slightly weaker in February, at 57.3, compared with January, at 57.9.

New order volumes continued to increase, recording a figure of 56.2 compared with 56.5 the previous month. Some firms received more orders after the adverse weather conditions in the UK in January.

Increased construction activity and new orders meant that the rate of recruitment in the industry was at its highest in four months, up to 54.5 from 53.8 in January. Employment in the sector has now increased for eight consecutive months.

Some firms also said the rise in activity meant they had increased their quantities of purchases, with buying up at 56.6 - the sharpest rate for 26 months.

Supplier lead-times continued to lengthen, from 45.2 to 44.2. Constructors said the rise in purchasing had increased the pressure on suppliers.

New contracts caused firms to increase their use of subcontractors for the second month in a row, from 50.8 to 50.5. The quality of subcontractors work, however, is said to have deteriorated, falling from 47.1 to 46.3 - the sharpest rate for 51 months.

Constructors remain optimistic about future activity levels, citing new contracts, anticipated market growth and increased activity.

SMmar2007

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