Purchasing Managers' Survey Shows Construction Growth Is Accelerating

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27th November 2013 16:22 - Construction

According to the Markit/CIPS UK construction purchasing managers' index (PMI), October 2013 saw the sharpest rise in construction output for more than six years. The PMI posted a score of 59.4, up from 58.9 in September - any score above 50.0 indicates growth.

Housing activity remained the strongest performing area of the construction sector, despite the pace of expansion slipping from September's near ten-year high. Meanwhile, the latest data pointed to accelerated rises in both civil engineering and commercial activity. The rate of growth in commercial activity was the most marked since April 2012.

Construction companies throughout the UK have reported that their output has been boosted by improvements in the economic outlook and a corresponding upturn in client spending. In addition, survey respondents cited better housing market conditions as a key driver of activity growth.

However, the latest rise was slightly less marked than August's recent peak, with higher levels of new work contributing to a robust increase in staffing levels during October. The latest upturn in employment levels was the steepest for six years, and contrasted with the uninspiring rate of expansion seen on average in the first half of 2013.

Findings suggest that increasing levels of confidence about the outlook for business activity had supported jobs growth in the construction industry during October. Among respondents, half (52%) anticipate a rise in output of the coming year - just a tenth (12%) predict a reduction.

Senior Economist Time Moore, said:

"UK construction output continues to rise live a phoenix from the ashes, with housing, commercial and civil engineering activity all seeing strong rates of expansion at the start of the fourth quarter."

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