UK construction firms are bullish in their outlook, with over half expecting industry activity to be higher in a year’s time, according to the latest survey from the Chartered Institute of Purchasing & Supply.

The survey found that this optimism stemmed from the health of the commercial sector, which is leading growth, while the housing and civil engineering sectors are lagging.

The CIPS reported that in August, its Purchasing Managers’ Index hit its highest level in sixteen months, at 57.4.

The index, which is a seasonally adjusted measure of the health of the construction economy, reflected “a robust rate of expansion”, according to the CIPS.

The findings come despite gloomy reports of a slowdown in the construction sector from bodies such as the DTI and Building Costs Information Service, which have both warned that demand for construction is decreasing.

Roy Ayliffe, director of professional practice at the CIPS, said August’s growth activity was the strongest seen since April 2004. He said: “This latest upturn was underpinned mainly by strong growth in commercial activity – the best performing of the three sectors covered by the survey.

In contrast, growth in housing activity was only marginal, while civil engineering contracted for the first time since May.”

Meanwhile, the Commercial Activity Index reached 62 last month.

Source

QS News