UK builders stuck in the slow lane

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The Independent Online

Britain's builders were stuck in first gear in January, as the industry's growth slowed to a crawl, the Chartered Institute of Purchasing and Supply (Cips) said yesterday.

Housebuilding and civil engineering output shrank, while jobs growth also stagnated, Cips said. Its activity index, where a score over 50 means expansion, slowed from 53.2 to 51.4 – signalling the most disappointing growth since last autumn.

The survey was something of a curate's egg as it surprisingly showed building firm bosses at their most optimistic for eight months.

But David Noble, Cips chief executive, said: "This confidence bodes well for the year ahead, although this visibility over potential new business will need to convert quickly into tangible work if employment levels are to improve."

Construction is lagging behind more buoyant manufacturing growth, but the clearest signs of the UK's economic health will come from its January snapshot of services firms. The sector accounts for three-quarters of the economy and a weak performance here is likely to persuade the Bank of England's rate-setters to launch an even bigger dose of quantitative easing next week.