UK construction grew at the fastest rate for six years last month as the property market continues to gather steam. House building continues to lead the way but civil engineering and commercial developments are also showing strong signs of growth.
The news comes from the latest Markit/CIPS UK construction purchasing managers’ index (PMI) which recorded a score of 59.4. Any score above 50.0 is an indicator of growth and October was the sixth consecutive month in which the index has risen.
Construction companies report that output has been boosted by the improving economic outlook and renewed client spending. Even more encouraging is the fact that the survey reveals that 52 per cent of respondents expect output to increase over the coming year while only 12 per cent anticipate a fall in activity.
In terms of commercial construction, the sector recorded the most marked acceleration of growth since April 2012, indicating that confidence is returning to the market. However, it must be remembered that there has been very little development outside London during the recession and it will take a rise in speculative development to really kick-start construction in this area.
This is dependent on investment and access to capital but there are encouraging signs that development in the regions is on the rise as the improving economy drives demand for commercial space.
Markit senior economist Tim Moore is pleased with the results of the survey which exceed forecasts.
“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,” he said.
