Construction activity continues to build

2 August 2011

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2 August 2011 | Adam Leach

Activity in the UK construction sector grew again in July, with the rate of growth remaining broadly unchanged from June.

The Markit/CIPS Construction Purchasing Managers’ Index (PMI) reported a figure of 53.5 for the month, a very slightly weaker performance than June’s figure of 53.6. A score above 50 indicates growth.

The report also found continued growth in the number of new business orders, again at roughly the same rate as the previous month’s PMI. On a less positive note, employment fell for the second month running. Despite increasing slightly, confidence across the UK construction sector remained at a historically weak level.

“Concerns over the stability of growth going forward, for private as well as public sector firms, are likely to hinder spending on construction projects and, ultimately, the expansion of the sector,” warned Markit economist and PMI author Sarah Bingham.

Commenting on the report, CIPS chief executive David Noble said: “It’s a case of ‘as you were’ for the UK construction sector this month with little change in the rate of activity growth since June.

“While the sector is battling against poor economic sentiment, high inflation and continued worries in the Eurozone, the sustained growth, albeit at a historically mild pace, has to be seen as a positive, especially compared to the fallback in the manufacturing sector.”

Yesterday’s Manufacturing PMI reported the first decline in activity for the sector in two years as the rate dropped below the critical 50 mark to come in at 49.1.

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