Construction sector growth 'nothing to get excited about'

2 November 2011

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2 November 2011 | Angeline Albert 

The UK construction sector picked up with robust growth and a rise in new orders in October, following a state of near-stagnation in September.  

However, CIPS CEO David Noble described the performance as “nothing to get excited about”.

The Markit/CIPS UK Construction PMI registered a five-month high of 53.9 in October, up from 50.1 in September.

The steepest increase in new business since the spring has been aided by competitive quotes from construction firms. As a result of more new orders, the sector’s firms have continued to recruit staff and increase buying activity.

Noble, said: “UK construction output experienced a rebound in October, and accelerated at some pace after a broad stagnation in September. It’s still nothing to get excited about however. Due to current economic conditions, it may be some time yet before we start seeing the sustained growth the sector really needs.”

And confidence across the industry about future business activity dived to its lowest in almost three years. Input cost pressures have increased, with respondents reporting higher fuel and raw material costs as the main sources of upward pressure.

Commercial-based construction output was the main driver of overall growth. In contrast, civil engineering activity was broadly stagnant, while the housing sector continued to suffer with a decline in activity recorded for a fifth successive month.

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