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Construction sector sees output fall for third month

UK construction output fell for a third consecutive month in January, with the civil engineering sub-sector suffering its first drop in activity since August, a key survey has revealed.

Housebuilding activity continued to fall, and commercial property construction stagnated in January, according to the survey from the Chartered Institute of Purchasing and Supply.

January was the first month since last summer in which none of the three construction sub-sectors monitored by CIPS achieved growth.

CIPS' seasonally-adjusted construction activity index stood at 48.7 in January, unchanged from December and below the level of 50 which separates expansion from contraction for a third consecutive month.

A rare bright spot in the survey was a rise in CIPS' construction employment index from 49.6 in December to 50.7 in January – to signal a modest increase in the sector's workforce after three straight months of decline.

And, while new orders in UK construction fell for an eighth consecutive month, the pace of decline slowed between December and January.

Tim Moore, senior economist at financial information company Markit and author of CIPS' construction survey, said: "January's survey results are yet another indicator of the severe underlying fragility across the UK construction sector."

He acknowledged poor weather last month may have affected activity but did not believe this was the key issue.

He said: "Unfavourable weather outside is clearly far down the long list of difficulties afflicting construction companies at present. Weakness was again most prominent within the housebuilding sub-sector."

Contextual targeting label: 
home improvement

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