Saturday 4 February 2012

Construction industry optimistic for 2012 as growth eases

02/02/2012


By Maximilian Clarke

A slight easing of the pace of growth has done little to dampen UK construction firms? spirits, whose confidence has climbed to an 8-month high.

And despite a slight slowdown from the end of 2011 coupled with employment stagnation, construction companies are overwhelming optimistic about 2012, the monthly Markit/ CIPS construction purchasing managers? index suggests.


Commercial construction growth offset declines
in housing and infrastructure

A strong construction sector is vital to the UK recovery. Employing in excess of 2 million workers, the sector accounts for 8% of the UK GDP. That the industry overall remains in growth can be taken as a good sign, though declines within the housing and infrastructure subsectors must be addressed.

But within the industry, both housing and civil projects eased into decline but were more than offset by strong commercial demand in London in particular.

?2012 started positively for the UK construction sector, with further output growth recorded,? commented Sarah Bingham, Markit economist and author of the report, before cautioning:

?However, at a four-month low, the expansion was modest, reflecting a weaker rise in the volume of new business received compared with December. Furthermore, growth was focused on commercial construction, with house building and civil engineering activity levels both falling slightly. The resulting overall increase in output was insufficient to sustain job creation, with employment stagnating.

New business received by UK construction companies continued to rise at the start of 2012. However, the rate of growth eased to the weakest in the current four-month period of increase. Panellists commented that reductions in clients? budgets had led to the slower rise in new business.

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Source: http://www.internationaltrade.co.uk/news.php?NID=1607

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