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11th of August 2011
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UK construction growth slows further in July

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by Kay Mitchell

The Chartered Institute of Purchasing and Supply (CIPS)/Markit purchasing managers’ index (PMI) has today revealed growth in the UK construction industry slowed in July.

The PMI dipped to 53.5 in July from June’s reading of 53.6 – however, the figure beat expectations of a reading of 53.0.

Furthermore, the index remains above the crucial 50 mark, which separates growth from contraction.

Meanwhile, the survey revealed that while commercial construction and civil engineering activity grew on a monthly basis, residential construction contracted for the second consecutive month.

Commenting on the report, Sarah Bingham, Economist at Markit and author of the UK Construction PMI said: “Rates of growth for both new orders and activity were solid, but remained below long-run trends. Furthermore, employment fell for a second month running.

“The subdued level of confidence regarding future business expectations reflects the challenging outlook for the UK economy, and therefore the construction sector,” she said.

Construction accounts for around 6% of Britain’s economic output.

Meanwhile, the index comes shortly after figures revealed UK manufacturing activity contracted in July – the first time since the UK was in recession two years ago.

The closely-watched CIPS/Markit manufacturing PMI fell to 49.1 last month from June’s reading of 51.4.

The index is now below the crucial 50 mark, which separates contraction from expansion.

Service sector activity figures will be published later this week.

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News posted: August 2, 2011

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