2 March 2011 | Rebecca
Ellinor
The UK construction sector last month
enjoyed its strongest performance since June, the latest Markit/CIPS UK
Construction PMI shows.
The index, published today, shows
output rising at its fastest rate in eight months on the back of new business.
The seasonally adjusted PMI posted 56.5, up from 53.7 in January – although
both were above the crucial no-change mark of 50 showing growth.
New orders expanded as a result of
more tenders becoming available and projects being confirmed.
Each of the three broad areas of
construction activity (civil, commercial and residential) monitored by the
survey registered growth in February. The strongest expansion was seen in civil
engineering, which grew at its fastest rate in three years. The latest increase
in residential construction was also marked compared to recent months, with
house building registering the fastest increase in activity since last summer.
Commercial activity increased at a solid pace and has grown every month for the
past year.
Employment fell again, but at the
weakest rate in the current sequence of job cuts and optimism over future
business prospects remained well below the long-term trend.
Sarah Ledger, economist at Markit and author of the UK Construction PMI, said demand and supply side pressures
continue to push up purchase prices, with construction costs increasing at the
fastest rate since August 2008 and delivery delays the worst for over three
years. She added: “Concerns about rising costs and fears over cuts in public spending
meant future business optimism.”
CIPS CEO David Noble said: “A weather-beaten UK Construction sector is showing signs
of repair. However, this new phase of recovery is at least in part built on
shifting sands.
“As
for manufacturing,
the construction sector is suffering from higher input prices which increased
considerably during February. A total of 53 per cent of panellists indicated a
rise in costs since January. Companies who have carefully managed costs may be
in a better position to deal with this and the likely further aggravations
caused by the unrest in the Middle East.”
