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UK construction climbs back towards growth - PMI
May 2, 2013 / 8:33 AM / 5 years ago

UK construction climbs back towards growth - PMI

LONDON (Reuters) - British construction output almost returned to growth in April, a survey showed on Thursday - the best performance in six months for a sector that has been the main brake on the country’s economic growth.

Construction workers build a new residential property development in north London, March 21, 2013. REUTERS/Neil Hall

The Markit/CIPS Construction Purchasing Managers’ Index (PMI) rose to 49.4, just below the 50 level that separates growth from contraction but well above a forecast for 48.0 in a Reuters poll of economists.

In March, the index stood at 47.2.

Tim Moore, senior economist at Markit, said the sector appeared to have benefited from a catch-up in work after a disruption caused by cold weather earlier in the year.

“The overall survey findings are an early indication that construction will act as less of a drag on UK GDP over the second quarter of 2013,” Moore said.

Construction was the biggest drag on Britain’s gross domestic product between January and March, lopping 0.2 percentage points off economic growth in the period.

The signs of a slow recovery in construction mirrored a similar reading for the British manufacturing sector on Wednesday.

Residential construction grew in April but commercial and civil engineering activity contracted, Markit said.

Overall demand remained weak, with new business volumes falling for the 11th consecutive month. Although the fall was small, it added to the longest run of declining new business since the steep recession of 2008-09.

Britain’s government has taken several measures to help the housing sector and plans to guarantee up to 130 billion pounds in higher-risk mortgages starting in January 2014.

Reporting by William Schomberg; Editing by Hugh Lawson

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