Construction recession eased in May

The recession in the construction industry eased in May, according to data from the Chartered Institute of Purchasing and Supply.

An overall index figure of 45.9 showed a fall in activity since April but the rate of decline was the weakest in over a year.

The index uses 50 as a base and any figure lower represents a contraction in activity while a figure of 50-plus denotes month-on-month growth.

Roy Ayliffe, director at CIPS, said: “After appearing to be in freefall in February, we are starting to see the construction economy show some signs of life and steer itself back onto the road of recovery.”

But he added: “This data suggests that, while the construction sector may be out of the intensive care unit, it's still some way from making a full return to health and there is always danger of a relapse.”

The housebuilding sector produced the most encouraging numbers, with an index figure of 48.9.

Paul Smith, senior economist at Markit, said: “This augers well for improvements in housebuilding and house price data going forward.”
Confidence among purchasing managers at construction firms jumped to a 21-month high of 72.6. Smith added: “The underlying trends in the key demand and activity indices are now clearly upward and consistent with much a much slower rate of industry contraction.”