Survey Indicates that Construction Sector Returns to Growth after Six Month Contraction

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20th June 2013 12:04 - Construction

According to research the Markit / CIPS Construction Purchasing Managers’ Index rose from 49.4 in April to 50.8 in May. David Noble, CIPS Chief Executive said:

 "The construction sector seems to have turned a corner after six dismal months.” 

The government undertook new measures such as a “Help to Buy” scheme which was implemented in March 2013 and aims to support people looking to buy their first home thus spurring construction opportunities.  The Help to Buy equity loan enables people to buy a newly built home with at least 75% of the cost met by a mortgage and a deposit of at least 5% of the purchase price, the rest being paid for by the government through an equity loan.

Markit Chief Economist Tim Moore felt that:

"The latest figures suggest that the sector is worryingly reliant on residential building work for thrust.”

However, the positive PMI shows signs that the UK economy is recovering, it came a day after news that manufacturing grew at its strongest pace for more than a year.  Couple this with two fifths (40%) of construction firms believing that output would rise over upcoming twelve months.  Unfortunately employment levels in the sector have hardly changed, which means that firms must not yet be operating at full capacity.

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