Construction activity rises for first time in two years

Construction activity has expanded for the first time in two years, according to the latest survey by the Chartered Institute of Purchasing and Supply.

Its monthly survey of contractors and construction purchasers recorded an index of over 50 for the first time since February 2008, rising almost five points to 53.1, where any figure above 50 indicates a growth in activity.

Growth came from a rise in new orders, with by far the strongest performance in the housebuilding sector.

Commercial activity grew as well, for the first time since February 2008, though work in civil engineering continued to decline.

Another sharp fall in construction employment and decreased use of subcontractors in March showed the fragility of the upturn.

In addition expectation of future improvements in business eased back, with positivity slightly lower than in previous months.

David Noble, chief executive officer at the CIPS, said: “Though it’s great to see the UK construction sector turn the corner after two years of relentless contraction, it’s still very early days.

"The recession hit construction the hardest, and this upturn may be short-lived. It’s worrying to see civil engineering contracting, given that mooted public sector spending cuts are yet to kick in.”