‘Little festive cheer’ for construction

2 December 2009

2 December 2009 | Jake Kanter

Activity in the UK construction industry continues to be dogged by the recession, as today it reports 21 months of successive contraction.

According to the latest CIPS/Markit Construction Purchasing Managers' Index - where a figure below 50 represents contraction - the sector registered 47 in November, a marginal improvement on the 46.2 index recorded the month before.

Contraction persists in commercial and civil engineering activity, but there was a glimmer of hope in the housing sub-sector as activity increased to 53 last month, compared with 50.9 in October. This was the highest level in two years, but remained below historic averages.

In addition, the number of new orders tipped into growth for the first time in 21 months as suppliers completed long-running contract negotiations.

Employment levels continued to be tight, while input prices rose for the second successive month. Future business expectations, however, remained sky-high.

CIPS chief executive David Noble said: “There is little festive cheer for the UK construction industry, which still remains very vulnerable. Despite a slight boost in volumes of new business, construction firms are still feeling the effects of the worst economic landscape seen in over a decade. Twenty-one months of continued decline has hit the industry incredibly hard.”

But he added one positive - activity is not plummeting at as fast a rate as it was last year.

Further coverage of PMI reports is available here

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