Carillion to drop four out of five suppliers
Rok comes tumbling down
Construction growth slowest since recession
Government streamlines building contract process
Complex procurement puts suppliers off
2 December 2010 | Angeline Albert
Clients’ deferring of spending
decisions has limited new business opportunities in the building sector, the Markit/CIPS UK Construction Purchasing
Managers’ Index found.
Data for November showed a
further increase of activity in the UK construction sector but growth remained
weak when compared to past performance. Jobs continued to be cut at a marked rate and
confidence is still historically low.
PMI posted 51.8 in November, a slight improvement on October’s 51.6.
Many construction firms indicated that conditions remained challenging,
with new contract wins limited.
Optimism over future business prospects improved and confidence is at its
strongest level in five months, but is still historically low.
Ledger, economist at Markit
said:“New contract wins were
restricted by lengthy negotiation periods and deferred spending by clients.
Expectations for business activity over the coming year did rise in the month,
although confidence remained below pre-recession levels.”
CIPS CEO David Noble said:“Growth
in order books continues to be sluggish as projects are delayed and this is
impacting on purchasing activity. Perhaps most concerning is the fall in
employment levels reflects job cuts rather than a freeze on new hires.
“The house-building sector in particular continues to suffer as a weaker
housing market makes builders nervous about committing to large new building
projects and competition is rife. Purchasing managers say that growth in the
current month was reliant on commercial and civil engineering – yet uncertainty
remains about the impact of public sector spending cuts.”
Noble said that the sector would “remain
stuck in a rut” until the economy as a whole strengthens.