Sharp Rise in UK Construction Activity Recorded

Posted on 4 September, 2013 by Neil Bird

UK construction activity rose sharply in August as the upturn in the economy begins to generate demand.

The Purchasing Managers’ Index for Construction, which is compiled by Markit and the Chartered Institute of Purchasing and Supply, hit 59.1 which is an improvement on the July figure of 57 and the highest reading for six years.

Although activity is still well below pre-recession levels, it is encouraging, because August was the fourth consecutive month to register a result above the crucial 50 figure. This sustained performance surpasses the expectations of many analysts and bodes well for the coming months.

The recovery has largely been driven by an upturn in house building and civil engineering projects but there has also been an impressive rise in commercial construction which recorded the sharpest increase in activity since May 2012.

Tim Moore, a senior economist at Markit believes that the figures are an indicator that the economy is performing impressively and that construction is demonstrating its potential to contribute to growth.

“With overall output levels now rising at the fastest pace for around six years, it seems highly likely that the construction sector will provide another positive contribution to UK GDP in the third quarter of 2013,” he said.

David Noble, the chief executive officer at the Chartered Institute of Purchasing and Supply, says ‘a new dawn is breaking in construction’ as the UK emerges from recession, with impressive performances from all three sub-sectors.




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