The medium-term outlook is fairly promising. The orders index increased by two points in April to 72, while the index for tender enquiries made an even larger gain, jumping four points to 62.
Firms are still relatively optimistic about short-term employment prospects, while optimism regarding tender prices is also on an upwards curve.
But all this activity could be creating scarcities. In the building sector, there has been a sharp rise in the percentage of firms experiencing large increases in material costs: 19% of firms reported increases compared to 7.5% in March.
Looking ahead, the Leading Construction Activity Indicator, which forecasts activity levels in the short term, indicates continuing growth in activity over the next three months, with the growth rate remaining steady over the period.
According to the latest orders figures from the DTI, total construction output rose by 14% in the first quarter of 2004, mainly thanks to a strong rise in commercial orders. The sector saw a 46% increase compared to the previous quarter and 19% compared to the first quarter of 2003.
The value of industrial and infrastructure orders fell by 15% quarter on quarter. Year on year, industrial orders remained unchanged, but infrastructure orders dropped sharply by 48%.