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2 February 2012 | Adam Leach
Despite an easing in the rate of
growth, a report out today shows optimism in the UK construction sector hit its
highest level since May 2011.
The Markit/CIPS UK Construction PMI for January reported a growth
figure of 51.4 for the sector. The score is above the crucial no-change mark of
50 and showed activity expanded, but at a slower rate than December, which
However, the easing in the rate
of growth, which was attributed to a slowdown in new orders, stagnating
employment and the completion of existing contracts, failed to dampen the
spirits of the sector.
Confidence among construction
companies hit the highest level since May 2011, making it the second most
optimistic month since the measurement began. Spirits were buoyed by improving
economic conditions and increased marketing opportunities. While input costs
continued to rise, the rate of inflation eased.
CIPS CEO David Noble, said: “Buoyed
by an increase in commercial activity, the continued growth in the construction
sector in January was tempered by declines in housing and civil engineering.
This resulted in a slower rate of expansion overall.
“It’s clear that many businesses
have replenished their levels of optimism and have high expectations for
improving economic conditions and new contracts. This confidence bodes well for
the year ahead, although this visibility over potential new business will need
to convert quickly into tangible work if employment levels are to improve.”
Markit economist Sarah Bingham
drew a parallel between the high confidence levels in the sector and yesterday’s manufacturing PMI, which
reported an eight-month high of 52.1. She said: “This [confidence level] suggests
that growth may pick up again in the sector in coming months and, on top of the
surprisingly strong start to 2012 reported by the sister survey of
manufacturing, will raise hopes that a slide back into recession may yet be