UK construction drops but is still in growth

CIPS 2 May 2012
Construction sector follows manufacturing with a drop this month

The UK Markit/CIPS Purchasing Managers’ Index® (PMI®) for the construction sector shows output has eased from a 21-month high, but is still in growth.

Employment has continued to increase at a modest level and input cost inflation has been at its lowest since March 2010. The index posted at 55.8, down from the previous month’s 56.7.

David Noble, CIPS CEO comments:

“This month’s construction PMI figures point towards the continued recovery of the construction sector.
However, 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.

“In particular, growth in new contracts won and improved confidence, have not yet been accompanied by comparable increases in employment which may indicate some fragility in the sector for the longer-term. Performance in housing, although slightly higher than last month, remains the poor relation to commercial and civil engineering.

“Suppliers too are under pressure, having reduced capacity during the downturn, they are now struggling to replenish inventories. This has led to increased delivery times and adds a further drag on the industry as a whole.”

For press enquiries, call the Press office on 01780 756777 or email: The PMI data is available to purchase.

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