GROWTH in the UK's construction sector accelerated in December, according to a survey yesterday which provided a modest ray of light amid the wider economic gloom.
The Chartered Institute of Purchasing and Supply's purchasing managers' index for construction rose from 52.3 in November to 53.2 in December on a seasonally-adjusted basis.
This took it further above the level of 50 which separates expansion from contraction to signal an accelerating pace of growth.
All three of the sub-sectors monitored by CIPS – housebuilding, commercial property construction and civil engineering – showed solid growth.
Civil engineering had shown a marginal decline in its output in November.
The UK construction sector reported a further solid rise in new business in December.
Employment in the UK construction sector grew for a fourth consecutive month in December, and at a slightly faster pace than in November. However, the use of sub-contractors declined last month.
Construction companies' confidence about activity over the next year, while it improved marginally between November and December, remained weak by historical standards.
A survey from CIPS on Tuesday revealed the UK manufacturing sector had in the fourth quarter of last year suffered its steepest fall in activity since the depths of the recession in the second quarter of 2009.
CIPS' survey of the performance of the dominant services sector, due today, could provide important clues on whether or not the UK economy as a whole slipped back into reverse during the fourth quarter.
Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "Latest survey evidence on the construction front indicates the sector grew modestly in the fourth quarter of 2011, but faces a challenging and uncertain 2012."
He added: "It is welcome news to see any evidence that part of the economy is growing at the moment.
"However, signs that construction output expanded in the fourth quarter of 2011 do not hugely dilute concern that GDP (gross domestic product) could have contracted.
"The construction sector only accounts for 7.6% of GDP, while the corresponding manufacturing surveys indicate that activity in that sector contracted appreciably in the fourth quarter."
David Noble, chief executive officer at CIPS, said: "Despite the overall growth in construction output and relatively milder weather conditions, December's PMI painted a mixed picture."
Sarah Bingham, survey author and economist at financial information company Markit, said; "Optimism continues to be hindered by concerns regarding low client confidence and worries over wider economic and market conditions."
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