Member Article

Construction growth slows in May

Construction growth slowed to a three month low in May, as new orders fell and optimism for the year ahead fell sharply.

The Markit/CIPS Construction Purchasing Managers Index fell from 55.8 in April to 54.4 in May, beating forecasts for a fall to 54.2, Any number below 50 indicates contraction.

Despite this however, the reading was it its lowest level for three months.

Commenting on the figures, David Noble, chief executive at CIPS said: “Reports of the UK’s return to recession appear to have delivered a blow to general confidence in construction, with this month’s PMI posing some big questions for the sector in the coming month.”

A fall in output was across housing, commercial construction and civil engineering, all contributed to the decline, although house building grw at the weakest rate and civil engineering declined at a sharp rate.

The latest results will raise concerns over the current health of the construction sector and its short term prospects.

Despite the poor output, employment in the sector grew, rising to 52.2 from 51.7 in April. Many companies asked said they relied on competitive pricing to win contracts, although falling confidence in economic prospects weighed down on new work.

This was posted in Bdaily's Members' News section by Ruth Mitchell .