New signs of stability in the UK construction industry have emerged after figures for January 2010 revealed the sector shrank at its slowest rate in 23 months
The figures will offer some relief to the UK’s recession-battered tradesmen, who have been among the worst affected by the economic downturn.
The CIPS/Markit construction Purchasing Managers Index (PMI) climbed to 48.6 last month – an improvement on the 47 expected by economists and only marginally short of the threshold that indicates positive growth.
It was thought that winter’s freezing weather may have slowed progress over December and January, raising concerns that growth would be stifled during the first month of what will be a tough year for the sector.
Howard Archer, chief UK economist at IHS Global Insight, said: ‘It is actually welcome news that the contraction in activity was not deeper in January given the adverse weather conditions.’
New orders were down for the second month following a slight increase in November, while unemployment fell again, albeit at its slowest rate since August 2008.
Archer added: ‘The overall impression is that the construction sector is stabilising after enduring a major recession, and it will be desperately hoping that the economy can generate significant recovery after crawling out of recession in the fourth quarter of 2009.’