Civils performance 'poor' according to latest indicators

Large projects like the Olympics have buoyed civils performance, but not enough

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Civil engineering continues to outperform the rest of the construction sector but this is little cause for celebration according to the Chartered Institute of Purchasing and Supply (CIPS).

Commenting on the UK Construction Purchasing Managers' Index (PMI) survey, CIPS director of professional practice Roy Ayliffe said: "Purchasing Managers in the UK construction sector saw conditions worsen across the board in July.

"Housing was again the sick man of the industry, as levels of activity plunged to a record low. That said, poor performance in the commercial and civil engineering sectors couldn't provide any cause for celebration," he said.

The headline figure from the report - the seasonally adjusted Construction Purchasing Managers' Index (PMI), which is designed to provide a single figure measure of the trends in construction sector output – maintained a downward trend in July, reaching a new series low of 36.7. At this level, the index pointed to a considerable fall in activity since the previous month.

While activity continued to contract in all three of the construction industry's sub-sectors, by far the most noticeable fall was recorded in housing, where activity declined at an unprecedented (for this survey) record pace.

"July marked an end to constructors' optimism about recovery, as spirits were knocked by the persistent and rapid decline in new business and activity. More jobs were shed - and at a faster pace than in June - as pessimism about the sector's future took hold," said Ayliffe.

Having plunged over twelve points during June to a series low of 40.0, the seasonally adjusted Civil Engineering Activity Index rebounded somewhat during July, reaching 46.5. Although a considerable improvement on the previous month, and the highest reading of the three construction sub-sectors covered by the survey, July's index level nonetheless signalled a marked drop in civil engineering activity since the previous month.