New Orders Boost Construction Industry
Positive signs are beginning to emerge in the construction sector after it was revealed that the amount of new orders has grown.
The news comes on the back of an increase in house prices which gave construction of residential properties a boost in November.
New orders
The latest figures released by the Chartered Institute of Purchasing and Supply (CIPS) and Markit show that for the first time since February 2008 new orders have picked up in the construction industry.
The rise from 46.2 in October to 47 in November on the key activity index means that although the sector is still in contraction for the 21st consecutive month, there are signs that things are improving.
Numbers over 50 on the key activity index are indicative of expansion in the industry.
Figures coming from the USA indicating that construction spending has increased for the first time in six months are also likely to give some hope to the industry.
Construction Industry
The construction industry has been the area most affected by the economic downturn though some of the big names in the industry have recently shown figures indicating that recovery is not far off.
Builders of residential and commercial properties have had to scale back their plans which in turn have led to a decrease in employment for the 18th month in succession.
Declines were also reported in the commercial and civil engineering sectors leading to Chief UK economist at IHS Global Insight, Howard Archer, to suggest that construction is unlikely to help an expected upturn in Britain’s fourth sector growth.
He said: "It seems the best that can be hoped for is the construction sector will only be a modest drag on overall economic activity.”
Chief Executive of CIPS, David Noble added: "A broader economic recovery will improve the sector's outlook.
"However, it appears we are still some way off from returning to growth let alone reaching the level it was at only two years ago."
