Housing construction slows

Julian Harris
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HOUSING activity shrank in April, knocking growth in the UK’s construction sector, it was revealed yesterday.

In a minor blow to the UK’s second-quarter growth prospects, construction fell over three points in the latest purchasing managers’ index.

“The index still indicates expansion, but the bleaker outlook implies a slowing of building activity this year,” said Tim Ohlenburg of the Centre for Economic and Business Research.

The headline rate came in at 53.3 compared to 56.4 in March, dragged down by a contraction in housing, which measured 48.1, and a notable fall in the civil engineering sub-index – down to 53.2 from 58.5. Index scores above 50 signal economic growth.

“April’s expansion was tempered by weakness in the housing and civil engineering sectors, although overall new orders continued to rise – largely supported by the commercial sector,”?” said David Noble of the Chartered Institute of Purchasing and Supply (CIPS).

Commercial construction growth accelerated into the second-quarter, up from 53.1 to 55.5, benefiting from a noticeable pick up in activity elsewhere in the economy.

New orders in the sector have grown for 14 straight months, measuring 54.8 in last month’s index.

Gloomy construction figures from the Office for National Statistics were questioned by Gemma Wallace of Markit, which compiles the data.

“Our data suggests a less-dismal start to the year than official figures are indicating,” Wallace said.

“The survey pointed to a modest rebound in the first-quarter from the weather-related weakness at the end of last year, contrasting with the huge 4.7 per cent decline in output signalled by government statistics.”