Latest Markit's PMI report shows increased confidence despite shrinking sector

The UK construction sector shrank for the fifth straight month in March, according to Markit’s latest purchasing managers’ index (PMI) for constructors. However on a positive note PinBoard is pleased to hear that expectations for the sector have improved and the fall in new orders has slowed, suggesting that there may be light at the end of the tunnel.

The index for March was 47.2 which is up from 46.8 in February, but still below the 50 mark that indicates no change.

The report states that eight of the last ten months have seen activity of the construction industry decline.

However, business expectations have increased considerably this year with the survey’s sub-index moving from 56.1 at the end of 2012 to 64.3 last month.

“The construction sector seems to have a spring in its step as confidence hit its highest level in a year despite the challenging state of the weather, performance and output in March,” commented David Noble, of the Chartered Institute of Purchasing & Supply, which helps prepare the data for the survey.

There is even more encouraging news as activity in the housing sector has grown, with its survey score edging up to 50.8 in March from 50.4 in February. Yet commercial construction activity (at 46.2) and civil engineering (at 42) remain in decline.

Vote in our state of the construction industry survey here

“While the government’s focus on housing appears to have had a positive effect as it out performed other sectors, civil engineering is a different story; here the lack of public spending has resulted in the fastest rate of contraction since October 2009,” Noble added.

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