Construction activity keeps growing slowly

Activity in the UK construction sector continued to grow during November, according to the latest Markit/CIPS Construction Purchasing Managers’ Index.

Although conditions remained challenging, the seasonally adjusted index rose slightly from 51.6 in October to 51.8 in November. Housing was the only subsector to show a fall.

The rise continued a nine-month growth trend, but was the smallest monthly rise within that period. However, optimism over future business prospects was the strongest for five months.

The commercial subsector showed the greatest rise in activity, while civil engineering also increased, but in housing activity showed the third consecutive monthly fall.

New contract wins were restricted by continuing deferral of work and limited tender opportunities.

As a result, employment in the UK construction sector fell for the fifth month in a row, while subcontractor usage decreased at the sharpest rate since February.

David Noble, chief executive 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.

“The housebuilding 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.

“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.”