UK Dec construction PMI hits 6-month low
Homebuilding activity declined for seventh successive month
By CFOWorld.co.uk staff | CFO UK | Published 11:09, 03 January 13
The UK’s construction Purchasing Managers’ Index (PMI), an industry survey of activity in the sector, plummeted to a level of 48.7 in December from 49.3 in November.
A level below 50 is indicative of a contraction in the sector. According to CIPS and Markit, who compile the data, December’s level was the lowest since June 2012. It was also the seventh consecutive month in which overall volumes of new contracts had fallen. Additionally, the rate of contraction in new orders was the fastest since April 2009.
Homebuilding activity declined for the seventh successive month, while commercial building work declined for the fifth month in a row. Only civil engineering bucked the overall December trend with a modest rise in activity.
Tim Moore, senior economist at Markit, said, “December rounded off a miserable year for the UK construction sector. Survey respondents are also relatively subdued about the 2013 outlook amid reports from their clients that budgets will be under even greater pressure over the year ahead.”
Commenting on the news, Howard Archer, chief UK economist at IHS Global Insight, said business expectations among UK construction companies remained low compared to long term norms in December, although they did at least rise from the 47-month low seen in November.
“October’s jump in construction output means that the sector may have expanded overall in the fourth quarter of 2012. This would be in marked contrast to the first three quarters and would lift the economy’s chances of avoiding a renewed dip in GDP in the fourth quarter of last year,” he told CFOWorld.
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