Jobs created in a mixed picture for UK construction sector

2 December 2011

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2 December 2011 | Angeline Albert 

Confidence in the UK construction sector grew modestly last month, and at a lower rate than in October.

The Markit/CIPS Construction PMI posted 52.3 in November down from 53.9 a month earlier. A PMI of 50 indicates neither growth nor contraction.   

Higher workloads resulted in an increase in employment. The rate of job creation was modest, but the strongest since March 2008. Use of sub-contractors was also reported to have increased last month.

The rate of new order growth accelerated to the fastest since May, but postponed and delayed projects restricted the extent of the sector’s expansion. Sector firms also saw a rise in new business and purchasing activity also increased. The rise in input buying was slightly faster than in October and a six-month high. Panellists reported a further lengthening of suppliers’ average delivery times.

Ending a five-month period of contraction, house building rose in November as well as commercial-based activity, which helped to support overall growth.

Input prices rose substantially during November with higher raw material, fuel and energy costs reported as the main drivers of input price inflation.

CIPS CEO David Noble said: “While growth was slower than October, construction companies are reporting a rise in new contract wins, which suggests an increased willingness to invest in new projects, a reason for optimism. It is great to see that the positives are also filtering through to employment with the rate of job creation in November at its fastest in over three and a half years. Construction companies remain cautious about the next few months and highlight the lack of government spending as a particular threat to future business activity.”


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