UK construction output returns to growth in May

CIPS 4 June 2013

Total construction output rises for first time since October 2012 led by residential building activity

As residential activity rises at its fastest pace in over two years,the Markit/CIPS Purchasing Managers’ Index® (PMI®) for the construction sector also showed supplier performance had deteriorated markedly in May.

The overall index posted at 50.8, up from last month's 49.4, indicating a moderate rebound in output levels and new work.

David Noble, CIPS CEO said: "The construction sector seems to have turned a corner after six dismal months. The improvement has been fuelled by a boon in house building, but the sector remains bogged down by contractions in commercial construction and civil engineering. Whilst confidence for the year ahead remains high, the poor performance of suppliers and flat levels of employment will serve as a reality check to construction and the wider UK economy.

"The Government's attempts to boost house building has given months of lacklustre growth a shot in the arm, but the continued decline in civil engineering can be largely attributed to the lack of public sector projects, which show no sign of increasing. This, coupled with poor performance in the commercial sector, means house building alone is driving industry growth.

"Supplier performance in May was the weakest since 2007, reflecting the slow pace of growth filtering through the supply chain, which continues to recover from the recession. This is typified by shortages of capacity, low stocks and worsening lead times which have reduced suppliers' capacity to meet demand as the sector tries to gear up for recovery. This will need to improve, before the sector sees a return to previous levels of output."

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

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