12.01.2005

UK Commercial construction growth, highest in five years .

December data for the UK construction sector indicated the most marked rate of growth in the industry since April, while commercial construciton posted its strongest gains in almost five years.

The Construction Purchasing Managers’ Index (PMI) designed to measure the overall health of the construction economy – registered 57.2, up from 56.7 in November, showing a strong rate of growth.

Over a quarter of survey respondents reported a higher level of activity than in the previous month, as underlying demand hardened further and more new contracts were awarded.

Most importantly for Crane and Access companies is that Commercial construction was the hottest sector, in terms of growth, reaching their highest levels in almost five years.

In spite of rapid inflation in the cost of materials respondents remained optimistic that levels of activity would be higher in a year’s time. Meanwhile, civil engineering activity contracted for the first time in four months, though only marginally.

New orders were up for the seventy-fourth month running, as firms successfully negotiated new contracts. The rate of growth of new orders was strong, albeit less marked than in the previous month.

When questioned about their expectations of activity levels in twelve months’ time, firms again expressed substantial confidence. Constructors anticipated an increase in the overall amount of work during the coming year, due to firm demand, planned expansions and increased marketing.


Roy Ayliffe, Director of Professional Practice at the Chartered Institute of Purchasing and Supply, said:

"Purchasing managers saw 2004 close with strong growth across all areas of the construction sector, driven by higher levels of business activity resulting from new contracts. The commercial sector performed particularly well, as rates of growth reached their highest in almost five years. Firms continued to face intense pressure from rising input price inflation, as a result of high oil prices. Despite this, panellists remained optimistic that levels of activity would be higher in a year’s time.”