Construction sector marks 12 months of expansion

THE construction sector continued its recovery in December marking 12 months of expansion, according to new data.

For the first time in nine months, the construction purchasing managers index registered increased activity across civil engineering, residential and commercial building.

Construction companies indicated they expect to do more business over the next 12 months although the level of confidence remains subdued.

David Noble, chief executive of the Chartered Institute of Purchasing and Supply, said: “Despite the overall growth in construction output and relatively milder weather conditions, December’s PMI painted a mixed picture and therefore offered little to raise the spirits.

“Civil engineering was the star performer with the strongest increase on the previous month but this must be viewed in the context of volatile activity flows at the end of the year, and it’s still too early to measure the impact of some of the big Government spending projects announced in the Autumn Review statement.

“Overall expectations for the coming year were generally hopeful but continue to be skewed by wider economic uncertainties. Though there were modest increases in employment, it’s likely that many firms were hiring through necessity rather than optimism about any pick up in business in the next couple of months.”

The survey suggests that new business increased for a third consecutive month in December while suppliers’ delivery times lengthened.

Report author Sarah Bingham, an economist at Markit, said: “The survey suggests that the sector should make a positive contribution to the economy in the final quarter of the year, helping avoid a possible slide back into contraction.

“House building, commercial construction and civil engineering all saw higher activity in December. However, the sustainability of the overall rise in output remains uncertain, with confidence about the year ahead still relatively subdued. Optimism continues to be hindered by concerns regarding low client confidence and worries over wider economic and market conditions.”