Construction activity, particularly in the commercial property sector, has seen another fall in April for the sixth consecutive month, according to a new survey by the Chartered Institute of Purchasing and Supply (CIPS).
Both the commercial and civil engineering sectors have seen a major drop in output, even though the rate of activity decline has slightly eased. New orders have also fallen for the 11th month in a row. It is therefore no surprise that the CIPS survey highlighted a second consecutive month that employment within the construction field had fallen. Generally, these trends have seen the longest period of decline in the sector since the global financial crisis hit in 2007.
The purchasing managers' index for the sector may have risen to 49.4 in April, compared to 47.2 the month earlier, but this is still lower than the 50 level which marks a separation between expansion and contraction. This small rise has only been because the rate of decline has slowed down.
David Noble, chief executive officer at CIPS, said: "Recent GDP figures reinforce the view that construction is still a weak spot for the UK economy. Commercial and civil engineering activities remained the laggards of the sector in April, burdened by longer supplier lead-times and a workforce down to bare bones, making it hard to see any major shifts in momentum in the near future."
The only good news from the report was that residential construction has seen a small rise, but it should be noted that this acceleration was still very slow.
Analysts will be waiting on the official second quarterly figures for a clearer picture. Howard Archer, chief UK economist at consultancy IHS Global Insight, added: "It may be too optimistic to think that construction output could actually expand in the second quarter, but the survey suggests that, at the very least, the sector should be less of a drag on GDP."