Construction sector ‘still fragile’

2 March 2010

2 March 2010 | Jake Kanter

Activity in UK construction declined further last month and the industry remains “confined in recession territory”.

According to the latest CIPS/Markit Construction Purchasing Managers’ Index – where a figure below 50 represents contraction – total activity in the sector registered 48.5 in February, a drop in activity from the 48.6 posted the month before.

Housing activity continued to rise, but at a much slower rate than in January. Rising residential builds meant the sub-sector registered 51.8 last month, compared with 52.9 in January.

Commercial and civil engineering activity did not mirror this growth. Both contracted last month, albeit at a slower rate than in January.

Poor weather conditions and problems funding construction work meant that new orders fell, while employment activity continued to be damaged by economic conditions.

Input prices remained on the rise and future business expectations continued to soar.

CIPS chief executive David Noble said: “While the UK economy slowly pulls into recovery mode, the construction sector has now been confined in recession territory for two years and is still very fragile. Though this was a relatively modest rate of contraction, tough operating conditions, dire weather and funding constraints dampened overall sector activity.”

Further coverage of PMI reports is available here.

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