The latest survey of construction buyers shows vacancies being created at the fastest rate since the Markit/CIPS UK Construction PMI began in 1997.

Output growth also hit a four-month high with the index hitting 62.6 in June from a seven month low of 60 in May.

The headline index has now posted above the 50.0 no-change threshold for 14 months running and the latest reading signalled the strongest pace of overall output growth since February.

David Noble, Group Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “The construction boom ramped up to a four – month high in June, fuelling the strongest rise in job creation in the survey’s history.

“New orders accelerated sharply this month, with much of the increase driven by the expanding housing market and supported by improved commercial activity.

“Despite civil engineering taking some heat out of activity, UK construction is well positioned to deliver sustained growth in the coming months.

“Reflecting the strong rebound and favourable economic conditions, firms felt encouraged to take on more staff and boost their operating capacity.

“These chimed with positive business expectations for the year ahead; although a number of firms highlighted some concerns about the prospect of interest rate rises.

“Whilst the headline figures this month painted a positive picture, let’s not forget about the under lying pressures on building materials and manpower at supplier levels.

“Delivery times continued to lengthen a great deal and prices were pushed up. Pressure on suppliers needs to be watched if the sector wants to maintain a steady growth trajectory. ”

Tim Moore , Senior Economist at Markit and author of the Markit/CIPS Construction PMI, said : “UK construction companies started the summer with another surge in house building and commercial activity, which helped to offset a slight moderation in civil engineering growth as temporary projects related to flood relief came to completion.

“The latest survey suggests that the UK construction sector has expanded by more than 1% over the second quarter of 2014, driven by improvements in the underlying health of the UK economy, favourable funding conditions and robust increases in new housing starts.

“ A key recent development across the construction sector has been the return to pre-recession rates of job creation, following a prolonged period of falling payroll numbers and cuts to operating capacity.

“Moreover, the latest rise in construction employment was the fastest since the survey began in 1997, which represents a remarkable yardstick of progress as the sector looks to recover the ground lost over the past seven years.”

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