Commercial projects boost construction sector

2 May 2012

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2 May 2012 | Adam Leach

Strong growth in commercial construction projects drove expansion in the sector last month, but the overall rate of increase slowed compared to March.

The Markit/CIPS UK Construction Purchasing Managers’ Index for April recorded a score of 55.8, indicating a growth in activity but at a slower rate than in March, which recorded a 12-month high of 56.7. The growth also drove an increase in employment for the second consecutive month.

Activity increased in each of the three sectors, commercial, residential and civil engineering, but as in recent months the commercial sector was the strongest performer. The growth was driven by a strong increase in new orders, which respondents attributed to a continued rise in client confidence.

Input price inflation continued to rise, marking 27 consecutive months of increases. But in positive news for purchasers, the rate of increase dropped to the lowest level for two years.

Tim Moore, senior economist at Markit, said: “April saw another generally buoyant UK Construction PMI survey, with the rates of output and new order growth close to March’s recent highs. Improved inflows of new work have also helped raise business expectations in the sector from the three-year low seen last autumn.”

David Noble, CEO at CIPS, said the findings showed a “continued recovery” in the sector. But he offered caution. “Despite good news for order books and a rise in purchasing activity since the start of the year, it’s worth remembering that there is still a long way to go to match the expectations of growth seen before the 2010 spending review,” he said.

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