UK Construction Market Improves

The information presented by CIPS/Markit UK Construction PMI suggests that all three sectors of construction in the UK (housing, commercial and civil engineering) have showed slight signs of improvement in April 2009. The PMI increased by almost 8% (from 30.9% to 38.1% in March and April accordingly), with index tracking trends also increasing across the three construction sectors. Roy Ayliffe, the Chartered Institute of Purchasing & Supply director claimed that despite the backdrop of current market uncertainty, fierce competition, and as a result, fewer new orders, the UK construction sector has seen some improvements in April. He added that the confidence in the future of the construction sector has become more vivid as more and more managers note that the previously postponed contracts are about to recommence. The survey showed that optimism among sector professionals has risen to the highest level since June of 2008 with business conditions being expected to improve this year. For instance, Markit Economics economist, Gemma Wallace, said that the recession that has been affecting the UK construction economy real bad has eased sharply in April. The headline PMI has reached its highest level in the course of 7 months. However, she agreed that it will take a long time to totally recover the confidence, which will bring around the demand, in the construction sector. Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (RICS) claimed that his organization still expects the construction industry to face a double digit decline in 2009, but the recent survey as well as signs of a picked-up activity on the housing market gives a slight hope of the industry recovery in the beginning of 2010.