CIPS survey shows growth for September but confidence at lowest since March 2009

The UK construction sector continued to grow in September according to the latest data from the Chartered Institute of Purchasing and Supply. However, confidence over future business expectations was lower, and jobs were cut at the fastest pace in six months.

The survey of purchasing managers recorded an index figure of 53.8, which is stronger than the 52.1 recorded in August, and follows increases in new contract wins, alongside work on existing projects. A figure above 50 shows there has been growth while a figure below indicates a decline.

Sarah Ledger, economist at Markit and author of the report said: “The UK Construction Purchase Manager’s Index remained above the 50.0 no-change threshold in September, signalling sustained growth in the sector.”

“However, new order growth slowed again, suggesting that, upon completion of existing contracts, activity may weaken. Residential construction is already falling, while strong commercial and civil engineering figures are likely to be benefitting, at least to a degree, from eleventh-hour budget spending. Given the impending public sector cuts, funds are unlikely to be replenished to the same extent”.

She added that confidence amongst construction companies suffered a sharp knock in September, with sentiment at its lowest level since March 2009. This was played out through a further marked cut in jobs.

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