THE pace of job creation in the UK construction sector eased in January to its slowest in 13 months, a survey has revealed.
The survey, published yesterday by the Chartered Institute of Purchasing and Supply (CIPS), also showed the degree of business optimism among construction companies was the second-lowest since October 2013. Some firms cited heightened uncertainty about the overall economic outlook in this context.
There was a slight acceleration in growth of the UK construction sector last month, following a slowdown in December, according to CIPS. However, the pace of growth remained well adrift of rates seen in the summer and autumn of last year.
CIPS's headline purchasing managers' index for UK construction, which measures activity, rose from 57.6 in December to 59.1 in January on a seasonally-adjusted basis, well above the level of 50 which separates expansion from contraction. However, it was above 64 in both August and September last year.
The employment index for UK construction fell from 60 in December to 59.2 in January. Although it continued to signal significant job creation, the employment index was at its lowest level since December 2013.
The survey showed the pace of growth in housebuilding activity picked up slightly between December and January, but remained well adrift of rates of expansion seen in this sub-sector last summer.
Growth of commercial property construction activity also accelerated slightly in January, having slowed in December. And civil engineering, the third of the construction sub-sectors covered by CIPS's survey, returned to a growth tack after dipping into contractionary territory in December.
The pace of growth of new orders for UK construction companies accelerated between December and January. However, as with output, growth of new orders also remained well adrift of rates seen last summer.
Tim Moore, senior economist at CIPS survey compiler Markit and author of the construction report, said: "UK construction companies have found their feet again after a protracted slowdown in output growth at the end of 2014.
"Stronger trends were recorded across housing, commercial and civil engineering, although each category of activity still experienced much slower growth than the high watermarks achieved last year.
"In short, the peak speed of the construction recovery seems to be over, but reports of its death have been greatly exaggerated."
David Noble, CIPS's chief executive officer, said: "After the disappointing end to last year and the drop in the industry's fortunes, the construction sector has had a perky start [to 2015] with good activity across all sectors."
He noted that expansion of activity in January was "well below the highs of the peak recovery months".
However, he added: "The modest increase in growth may beat away any wider concerns around an unsustained improvement in the sector's fortunes."
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