UK construction activity surprises in May

| June 2, 2011 | 0 Comments

The Chartered Institute of Purchasing and Supply (CIPS)/Markit construction purchasing managers’ index (PMI) has today revealed UK construction activity beat expectations last month.

The PMI rose to 54.0 in May, from April’s reading of 53.3 – beating expectations of 53.6.

Furthermore, the index remains above the crucial 50 mark, which indicates expansion.

Commenting on the report, Sarah Ledger, Economist at Markit and author of the UK Construction PMI said: “New order growth was marked, suggesting that increasing levels of output will be sustained.

“A look at the sub-sectors monitored shows a mixed picture, with levels of civil engineering activity down markedly, but a return to growth for housing.”

Meanwhile, the index comes shortly after figures revealed UK manufacturing activity slowed more than expected in May.

The closely-watched CIPS/Markit manufacturing PMI dropped to 52.1 in May, from a reading of 54.4 in April.

The reading was much lower than the 54.1 expected by analysts and the lowest reading since September 2009.

The manufacturing sector, which accounts for around 13% of economic output, has been one of the bright spots in the UK economy, but yesterday’s manufacturing data will no doubt raise fears about the recovery.

Service sector activity figures will be published tomorrow.

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