UK housing construction grows at fastest pace in nearly a decade: Markit
The UK construction sector registered strong output growth in September, led by robust residential construction activity. Construction in residential projects rose at the sharpest rate since November 2003, according to Markit Group. The global financial information firm continues to make headlines this week, having already released manufacturing data for the United States, euro area and United Kingdom.
September PMI data showed sustained growth across the UK construction sector, as underlying demand continued to rebound. Construction companies ended the third quarter of 2013 on a strong note, with overall output levels and new order books continuing to expand. Business inflows strengthened for the fifth consecutive month, leading to the highest level of business confidence in more than three years. The September PMI reading of 58.9 is down only fractionally from the near six-year high of 59.1 in August.
Among the three broad categories of sub-sectors, residential construction posted the highest level of business activity, followed by commercial construction, which increased by the fastest pace since May 2012. Civil engineering activity eased off its August high.
New business growth encouraged the hiring of new staff, as construction companies extended their current period of joob creation to four months. The recent expansion is also the most noteworthy since December 2007. More than half of construction managers expect a rise in business output over the next 12 months, compared to only nine percent who anticipate a fall. According to Tim Moore, senior economist at Markit, “Construction is no longer the weakest link in the UK economy,” signalling the once-fledgling industry is a key component of Britain’s recovery.
Earlier in the week Markit showed production in UK manufacturing advanced for a sixth consecutive month, rounding out the sector’s strongest performance since the first quarter of 2011. Third quarter GDP figures will likely reflect the recent upturn in manufacturing and construction. The UK economy expanded 0.6 percent during the second quarter, according to official figures from the UK’s Office for National Statistics.
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