Construction sector recession enters 23rd month

Published 03rd Feb 2010

Hopes of a recovery were boosted further today with a survey showing that the construction industry shrugged off last month's snowy weather and shrank at its slowest rate in nearly two years.

The CIPS/Markit index of purchasing managers rose to 48.6 from 47.1 the previous month, edging ever closer to the crucial 50 mark above which the sector is growing rather than shrinking.

Within the sector, housebuilding again expanded for the fifth month in succession, while the commercial and civil engineering sectors continued to fall, although the rate of decline eased.

David Noble, chief executive of the Chartered Institute of Purchasing & Supply, said: “Construction continues to be the worst performing sector of the UK economy – struggling in the face of credit supply shortages and overall economic uncertainty. Purchasing managers said the widespread chaos caused by the snow in January didn’t help an already fragile industry with new orders which are disappointingly low."

However, Howard Archer, chief UK and European Economist at IHS Global Insight, said: "It is actually welcome news that the contraction in activity was not deeper in January given the adverse weather conditions."

The figures come a day after an unexpectedly strong survey of the manufacturing sector for January. Mr Archer added that the two surveys combined, "boost hopes that the UK's nascent, marginal recovery has not been given a serious jolt by January's extreme weather."

Source: ' Times '

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