New orders rise at fastest rate since 2007

A strong surge in business in March led to new orders rising at their fastest rate for four and a half years, according to the latest Markit/CIPS Construction Purchasing Managers’ Index.

The index rose for the sixth consecutive month in March to 56.7, up from 54.3 in February.

The index has posted above the 50.0 no-change level that separates growth from contraction in each month since January 2011.

The commercial sector was the strongest performing sub-sector, while activity in the civil engineering sector also grew at its fastest rate since March 2011.

But industry experts questioned whether the survey results had picked up the “full picture”.

Simon Rawlinson, head of strategy and research at EC Harris, said: “Only as recently as the fourth quarter of 2011, the ONS said new orders across almost all sectors were down apart from infrastructure.

“On the face of it this data is great news but it feels like it’s picking up growth in the ‘good news sectors’ [commercial and civil engineering] and hasn’t picked up what’s happening in the public sector.”

Construction economist Brian Green said he was also sceptical about the CIPS/Markit figures: “There are methodological problems with this sample. If construction is doing well, why is Balfour Beatty’s construction division putting its whole work workforce on notice?”

But Sarah Bingham, an economist at Markit, said the survey should pick up activity in the public sector. “We ask people how orders perform in three sectors [commercial, housing and civil engineering] – we’d expect a lot of public sector work to fall into the housing and civil engineering sectors.”