Confidence building among construction firms

CONSTRUCTION firms are more optimistic than they have been at any time in the last eight months, according to new data.

Output in the construction sector grew in January but at its slowest rate in the last four months, the purchasing managers index suggests.

The housing and civil engineering sectors actually declined but were offset by a 23rd consecutive month of expansion in commercial construction.

Looking ahead, the survey found confidence that an improving economic backdrop and marketing initiatives would support growth.

David Noble, chief executive at the Chartered Institute of Purchasing and Supply, said: “It’s clear that many businesses have replenished their levels of optimism and have high expectations for improving economic conditions and new contracts. This confidence bodes well for the year ahead, although this visibility over potential new business will need to convert quickly into tangible work if employment levels are to improve.

“Input prices continue to rise, however the easing rate of inflation has improved the operating environment. As a result, we are seeing increased purchasing activity as companies attempt to fulfil new orders in these more favourable conditions.”

Across the sector, employment levels were largely unchanged in January and use of sub-contractors remained flat.