Buyers hail sharpest work upswing for six years

Aaron Morby 11 years ago
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Construction buyers saw workload in August rise at its fastest pace since September 2007.

According to the latest Markit/CIPS UK Construction Purchasing Managers’ Index confidence in construction is running high after an expansion in both workloads and orders in housing and civil engineering.

Construction firms are also very confident about the year-ahead with around 46% of survey respondents expecting a rise in activity and only 10% a reduction.

Adjusted for seasonal influences, the index jumped to 59.1 in August, up from 57.0 in July and above the neutral 50.0 value for the fourth consecutive month.

Markit/CIPS UK Construction PMI

cips august

Residential construction remained the strongest performing sector, with output rising at the fastest pace since June 2010.

August findings also recorded a steep rise civil engineering activity to its strongest since September 2007.

Even previously sluggish commercial construction activity increased at the most marked pace since May 2012.

David Noble, chief executive officer at the Chartered Institute of Purchasing & Supply, said: “A new dawn is breaking in construction. The industry is leaving the dark days of recession behind.

“This new direction brings new challenges, not least the prospect of additional work and insufficient capacity to meet demand. How the sector navigates these tensions and manages the supply chain could come to define its performance over the coming months.”

Improved confidence fed through to job hiring, with construction employment rising for the third month running and at a solid pace.

But greater demand for construction inputs placed pressure on suppliers’ operating capacity, with delivery times lengthening to the greatest degree since June 2007.

Tim Moore, senior economist at Markit, said that the steep upturn in civil engineering activity suggested that public sector demand had joined residential building as a key driver of construction output growth.

“New public sector infrastructure spending looks to have started making an impact on the ground, and this was a contributory factor behind the sustained construction sector job creation seen in August.”

 

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