–But Sector Reports Sees Job Cuts And Challenging New Orders Sit.
–But Confidence On Outlook Rises

LONDON (MNI) – The UK construction sector saw only mild growth in
November, according to the latest Markit/CIPS construction PMI –
although the headline activity index came in stronger than commentators
had been expecting.

The headline construction activity index rose to 51.8 from 51.6 in
October, Markit/CIPS said.

Among the key points in the latest survey:

The November data signalled a further increase of activity in the
UK construction sector, according to Markit/CIPS, but job cutting is
well underway and the new order situation is said to be ‘challenging’.
Still, confidence about the next year is improving.

Sarah Ledger, Economist at Markit and author of the UK Construction
PMI said:

“Whilst mild growth of the UK construction sector was reported in
November, PMI data signalled that operating conditions remained
challenging”.

“New contract wins were restricted by lengthy negotiation periods
and deferred spending by clients. Furthermore, jobs were cut again,
indicating that constructors see little need to maintain current
capacity.

“Expectations for business activity over the coming year did rise
in the month, although confidence remained below pre-recession levels.”

Commenting on the report, David Noble, Chief Executive Officer at
the Chartered Institute of Purchasing & Supply, said:

“In the short term, the prospects for the UK Construction sector
look gloomy but confidence about possible recovery in the next 12 months
has risen. Growth in order books continues to be sluggish as projects
are delayed and this is impacting on purchasing activity. Perhaps most
concerning is the fall in employment levels reflects job cuts rather
than a freeze on new hires”.

“The house-building sector in particular continues to suffer as a
weaker housing market makes builders nervous about committing to large
new building projects and competition is rife. Purchasing managers say
that growth in the current month was reliant on the commercial and civil
engineering – yet uncertainty remains about the impact of public sector
spending cuts”.

“We are likely to see construction improve only when the economy
as a whole strengthens. Until then, the sector will remain stuck in a
rut.”

–London newsroom: + 44 207 862 7492; email: ukeditorial@marketnews.com

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