LONDON (MNI) – The UK construction sector enjoyed a broad-based
increase in output in December, helped by a rise in new business,
extending the period of sustained expansion to 12 months, the latest
Markit/Chartered Institute of Purchasing and Supply Purchasing Managers’
report showed.

Activity growth was supported by an increase in new business, which
in turn led to a further boost in employment. However, confidence over
future business prospects remained relatively muted.

The seasonally adjusted Markit/CIPS Construction Purchasing
Managers’ Index posted at 53.2 in December, up from 52.3 in
November.

The latest reading signalled growth of UK construction sector
activity that was slightly stronger than seen in the previous survey
period. Nonetheless, the latest increase in output remained below the
series average.

However, for the first time in nine months, all three broad
construction categories registered rises in activity. The fastest growth
was in civil engineering, where trends in output have been relatively
volatile over recent months. Residential construction increased for a
second month running, while the expansion in commercial activity eased
to the slowest since December 2010.

Sarah Bingham, and economist at Markit and author of the UK
Construction PMI said: “PMI data signalled a positive end to 2011 for
the UK construction sector, with output rising again on the back of
another increase in new business. The survey suggests that the sector
should make a positive contribution to the economy in the final quarter
of the year, helping avoid a possible slide back into contraction. The
data so far suggest that gross domestic product probably stagnated in
the final three months of the year”.

David Noble, Chief Executive Officer at the Chartered Institute of
Purchasing & Supply, said: “Despite the overall growth in construction
output and relatively milder weather conditions, December’s PMI painted
a mixed picture and therefore offered little to raise the spirits.

The number of analysts forecasting the UK CIPS construction data
was not sufficiently large for a robust median, but those who did
predicted a modest decline in the headline index, with forecasts ranging
from 51.5 to 52.0.

The latest official data have shown the pace of construction sector
growth slowing, with output rising by 0.3% in Q3 after a 3.1% increase
in Q2.

The construction data are the second of the December CIPS data,
with the manufacturing data showing that sector contracting marginally,
with the headline index coming in at 49.6, up from a revised 47.7 in
November and well above analysts’ median forecast of 47.6.

–London newsroom: +44 207 862 7491; email: ukeditorial@marketnews.com

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