Pressure grows on firms reliant on public spend
Bad weather shrinks construction
Construction growth improves, PMI shows
Rok falls despite buyer success
UK insolvencies fall in October
2 February 2011 | Angeline Albert
in the UK construction sector grew in January thanks to improved weather
conditions and a lift in new orders.
the outlook was described as one of “nervous optimism” given
that a rise had been expected to follow disruption in December.
The Markit/CIPS UK Construction Purchasing Managers' Index (PMI) said the
past month witnessed a modest rise in activity, with
the PMI posting 53.7, up from 49.1 in December.
the first time since August 2010, all three UK construction sub-sectors
recorded a rise. Civil engineering was the strongest; commercial-based
construction activity extended its period of growth to 11 months; and ending a
four-month period of contraction, there was a slight increase in house
tender opportunities and contract wins boosted new order volumes. However, despite
rises in both activity and new orders, employment fell again in January for the
seventh successive month. Sub-contractor usage also declined over the month,
falling at the sharpest rate since October 2009. Rates charged by
sub-contractors also fell.
Although optimism among UK
construction companies is at its strongest in eight months, concerns
remain over cuts in public spending.
Williamson, chief economist at Markit said: “After
estimating for the boost to activity in January resulting from the disruption
to workflows in December, the underlying growth trend remains only very modest
and well below the surging pace seen in the second quarter of last year.
“Looking at the trend in recent months, the housing market seems to be a
particular area of weakness, with house building stagnating at best. The
outlook appears to be one of nervous optimism. This nervousness about future
prospects was highlighted by a disappointing further reduction in employment.”
CIPS CEO David Noble, said:“Despite the growth of
activity, an air of caution persists among construction companies as employment
levels continue to fall. Some companies that are doing well are hiring but many
more are continuing to adjust to lower workloads and deferral of projects.
Until growth becomes sustained it is unlikely we will see employment levels
rise substantially and consistently.”