Construction industry still growing yet one in five firms are cutting jobs
5 July 2011 1:03am
THE construction industry continued to grow last month, data released yesterday confirmed.
The sector printed 53.6 in a purchasing managers’ index (PMI) survey, down only slightly from the 54 recorded in May.
All scores above 50 indicate economic growth.
“June data rounds off a further solid quarter of growth, albeit down on the first quarter,” said economist Sarah Bingham from Markit, which compiled the data.
“This contrasts with the surprising weakness seen in the official data for the first three months of the year.”
Some economists have raised eyebrows at official figures from the Office of National Statistics (ONS) which show the construction industry significantly holding back the UK’s GDP growth.
A sharp slowdown in new orders (from 56.3 to 53.2) dragged on the headline index, while confidence plummeted to its first sub-60 reading of the year.
Expectations for future business were still positive, yet the level of optimism was severely hit, falling from 66.8 to 59.1 in the sub-index.
Job cuts in the industry, meanwhile, were the most severe in five months. After growth in construction sector employment was recorded in May with a score of 51.3, the level in June sank to 47.8.
Nearly one in five (18 per cent) of respondents noted a decrease in staffing levels at their companies.
The manufacturing sector hit a 21-month-low in June, according to Markit data published late last week.
Progress in services, the UK’s largest sector, will be revealed in today’s PMI figures, providing evidence of the economy’s overall second quarter performance.
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