Index shows output and employment are still down ut the contraction in new work eased in January and confidence rose

Trends in construction are up slightly, according to an industry report. The Construction Purchasing Managers' Index (PMI) rose from 29.3 in December to 34.5 in the first month of 2009. But despite being the highest reading for three months, experts warned that the figure was at a historically low level.

Roy Ayliffe, director of professional practice at the Chartered Institute of Purchasing & Supply (CIPS), said it was too early to predict an upward trend.

“Although Q1 opened with confidence among purchasing managers in the UK construction sector, it remained very subdued in comparison to historic data. This probably reflects the exceptional weakness of previous months more than any significant easing in the rate of contraction,” he said.

“As activity continued its downward spiral, firms were again forced to cull jobs. The remainder of this quarter will be important in ascertaining if the rise in the indices in January was an aberration or a real sign of a turning point in the cycle.”

Output dropped at the three subsectors monitored by the CIPS, with housing remaining the weakest and civil engineering remaining relatively strong.

The contraction in new work for UK contractors eased sharply in January, but the rate of decline remained rapid.

Employment and subcontractor usage dropped as activity fell and employers cut staff or imposed shorter working weeks. Availability rose to the greatest extent in the series history.

Meanwhile, confidence among constructors rose in January, with a number of firms claiming that they thought the worst of the economic troubles were behind them.