Construction sector says shocks are not over yet

By SCOTT REID
Published on 07/06/2012 05:16

CONFIDENCE in the construction sector suffered its biggest fall for nearly two years last month, fuelling fears about the strength of the economy.

The latest Markit/Cips purchasing managers’ index (PMI) for the sector also showed output was at its weakest for three months in May. The report’s activity barometer fell to 54.4 from 55.8 in April, but remained above the 50 mark that separates growth from contraction.

Housebuilders recorded only marginal growth, civil engineering projects saw much slower expansion compared with the previous month, while commercial projects remained resilient.

The month-on-month fall in business confidence was the highest since June 2010 – when plans for the autumn government spending review were first announced.

Cips’ chief executive David Noble said: “Reports of the UK’s return to recession appear to have delivered a blow to general confidence in construction, with the PMI posing some big questions for the sector in the coming months.”