Growth in the construction industry has slowed substantially in recent months to its lowest level for over three years, according to the construction indicator of the Chartered Institute of Purchasing and Supply (CIPS).

The CIPS indicator fell from 54·8 in April to 52·6 in May, tumbling closer to the 50 mark which separates expansion from contraction.

A decline in civil engineering work and static figures in the housing market were only slightly offset by growth in the commercial sector.

CIPS says that the reduced rate of activity is due to slower growth in new orders and, although order books show a rise, the increase in new business was the least marked in almost three years. As a consequence construction firms are seen to be curbing the hiring of new staff.

However, despite the unforeseen slowdown, confidence within the industry remained high, with more than half of firms predicting higher activity levels in 12 months’ time. CIPS said companies remained upbeat. Its future business activity index registered 76·3, as panellists’ optimism was buoyed by recent contract agreements and expectations of more tendering opportunities in the near future.

Source

Electrical and Mechanical Contractor