Construction industry at three-year high

05 - 08 - 2013

UK construction industry activity in July grew at the fastest pace since June 2010, according to a survey by data company Markit and the Chartered Institute of Purchasing & Supply (CIPS).

The Markit/CIPS Construction Purchasing Managers' Index (PMI) rose sharply from 51.0 in June to 57.0 in July. Expansion is defined as any figure above 50.

Construction companies linked the acceleration in output to greater inflows of new business in July.
Levels of activity increased in all areas of the industry but there was a particular surge in housebuilding.
‘New wave of optimism’

Markit senior economist, Tim Moore said that July’s survey highlights ‘a new wave of optimism across the UK construction sector.’

Construction companies were reporting ‘a pace of expansion in excess of anything seen over the past three years,’ he added.

‘Strongest level of confidence since the era of austerity began’

David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said the report suggests that growth could continue into the next quarter.

‘Better economic conditions, a jump in new business activity and the strongest level of confidence since the era of austerity began in 2010, strongly suggest this growth can be sustained into Q3,’ he said.

‘This rising confidence goes hand in hand with increasing output, underpinned by the expansion in new business orders, which was the steepest since April 2012. As a result, firms are starting to believe this is the real deal for the recovery, demonstrated by the strongest pace of job creation since December 2011.’

‘More good news for the UK economy’

Howard Archer, chief European and UK economist for IHS Global Insight, also welcomed the report, describing it as ‘more good news for the UK economy’. He said the construction industry is ‘seemingly increasingly shrugging off its long-term problems and now contributing to growth’.
PMI surveys are based on data from private-sector companies, which provide information on factors such as output, new orders, stock levels, employment and prices.






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