News
UK construction expansion ‘at six-year high’ in October
05 - 11 - 2013
UK construction activity grew at its fastest pace since September 2007 last month, according to a survey of purchasing managers.
The Markit/CIPS construction (purchasing managers’ index) PMI rose unexpectedly to 59.4 in October, up from 58.9 in September.
The PMI has been above 50 – the level that indicates expansion – for six consecutive months.
The PMI has been above 50 – the level that indicates expansion – for six consecutive months.
Housebuilding, boosted by government schemes such as Help to Buy, was the strongest performing sector. However there was a slight decrease in the pace of its expansion from its 10-year high in September.
Construction was one of the sectors that suffered the most after the 2008 financial crisis, due to the government and businesses cutting back on building projects to save money.
‘Like a phoenix from the ashes’
Commenting on the figures, Markit economist Tim Moore said: ‘UK construction output continues to rise like 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.’
‘6.3 per cent of national output’
The figures follow a string of positive news on the UK economy.
IHS Global Insight economist, Howard Archer welcomed the ‘good news’ but stressed that construction is only a small part of the UK economy.
‘While evidence that the construction sector is continuing to gain momentum is good news for overall growth prospects, it needs to be remembered that the sector only accounts for 6.3 percent of national output,’ he said.
‘Of critical importance to the construction sector going forward is that the economy holds up well over the coming months and that housing market activity sees sustained healthy but not excessive growth,’ he added.
