Construction activity has expanded for the first time in two years, according to two surveys published this week.
Research by the Chartered Institute of Purchasing and Supply (CIPS) and the Construction Products Association (CPA) showed small rises in output during March. However, both bodies said uncertainty over imminent public spending cuts made it unlikely the recovery would be sustained.
CIPS’ monthly survey of contractors and construction purchasers showed growth for the first time since February 2008, rising almost five points to 53.1 (a figure above 50 indicates a growth in activity).
The strongest performance was in housebuilding, but the commercial sector also rose for the first time in two years.
However, CIPS said work in civil engineering continued to decline, and respondents recorded a sharp fall in employment and the use of subcontractors. Expectations of future increases in work also fell slightly.
It’s worrying that civil engineering is contracting, given that public cuts are yet to kick in
David Noble, cips
A similar index from the CPA showed a small rise in demand for construction products on the previous year. The CPA barometer registered 51, the first growth since the first quarter of 2008.
David Noble, chief executive of CIPS, said: “The recession hit construction the hardest, and this upturn may be short lived. It’s worrying to see civil engineering falling, given that mooted public sector spending cuts are yet to kick in.”
Noble Francis, economics director of the CPA, said he was not confident recovery could be sustained. “Improved conditions can be partly attributed to the government’s fiscal stimulus during the recession.”
Meanwhile, research conducted by Mace shows that lead times for works packages have bottomed out after sustained falls in the past year.