Construction industry ‘remains in recession’

The construction industry’s route out of recession was hampered by the performance of the commercial property and civil engineering sectors last month according to the latest figures from the Chartered Institute of Purchasing & Supply.

According to the construction purchasing managers’ index (PMI) total construction activity was 47.1 in December, a slight improvement on November’s 47 but still below the key 50 mark – anything below that means contraction. The numbers haven’t been above 50 since February 2008.

New construction orders shrank in December after growing in November, falling to 48.7 on the PMI measure from 50.6.

Despite the sustained contraction in activity, optimism continued to increase with the business expectations measure rising to 71.3 from 68, as the industry predicted a recovery in 2010.

Another positive from the survey was a further expansion in residential activity, which rose to 58.9 from 53 on the PMI measure, marking the fourth month above 50.

David Noble, chief executive of the CIPE, described December as “another disappointing month for the UK construction sector”.

Unlike other parts of the economy, he said, “it seems unable to escape the shackles of the recession, as it entered its twenty-second successive month of decline.”