'New dawn' rises over UK construction

2 July 2013

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2 July 2013 | Adam Leach

New business wins and higher levels of output meant activity in the UK construction sector expanded for the second month running in June.

The Markit/CIPS UK Construction Purchasing Managers’ Index recorded a figure of 51 for the month, up slightly from the May figure of 50.8. A figure above 50 indicates an expansion in activity. The growth rate recorded for the month marks the highest rate of expansion for the sector since May 2012.

The main driver behind the increase came from the residential sub sector, with house building activity increasing for the fifth consecutive month. Commercial and civil engineering activity stabilised, bringing an end to their respective four and five month slumps.

Overall expectations of the sector were boosted by the increase in activity, with 41 per cent predicting further growth over the next 12 months, compared with just 10 per cent predicting a drop. Both employment and purchasing activity increased in June.

David Noble, CEO at CIPS, said: “A new dawn is emerging in the construction industry, with confidence of a sustained recovery beginning to build thanks to two months of consecutive output growth and the pace of new orders expansion hitting a 13-month high. Housing is the leading light sustaining last month’s performance, meanwhile commercial and civil engineering activity stabilised, arresting months of decline, giving further cause for optimism.” 

Tim Moore, senior economist at Markit, said: “Although the construction sector faces a long and fragile road to recovery, June’s survey highlights a nascent turnaround in optimism about future output levels in the sector.”

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