There have been further indications that the economy is over the worst of the downturn after figures showed the slowest pace of decline in construction activity for more than 12 months.
The Chartered Institute of Purchasing and Supply (CIPS) said the struggling sector saw a marked easing in the rate of contraction in the housing market during May.
Its purchasing managers’ index revealed that confidence among construction firms also rose to its highest level since August 2007, while new contracts fell only modestly since April.
The CIPS/Markit study showed a reading of 45.9 in May, up from 38.1 in April and a record low of 27.8 in February – marking its highest level since April 2008.
CIPS director Roy Ayliffe said that even though the sector is still in recession – as a score under 50 signals contraction – the figure suggests that the construction industry may be ‘out of intensive care’.
He explained: “After appearing to be in freefall in February, we are starting to see the construction economy show some signs of life and steer itself back onto the road of recovery.”
However, the survey confirmed continuing tough conditions, with competitive pressures remaining high and more jobs lost in the month.
Copyright © Press Association 2009
