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UK Construction Activity Remains Elevated in February: Markit

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UK Construction Activity Remains Elevated in February: Markit

Construction activity in the United Kingdom rose sharply in February, with job creation hitting a three-month high.

Markit Group’s gauge of UK construction activity eased slightly from the previous month’s six-and-a-half year high, settling at 62.6. The UK construction sector has been in expansion mode for ten consecutive months.

Civil engineering overtook housing as the strongest area of growth, as residential construction projects rose at the slowest pace in four months. Civil engineering projects expanded at the sharpest rate since the series began in 1997, Markit data showed.

February witnessed a sharp rise in new work, led by greater spending among local authorities on maintenance. Rising output and new business levels translated into the sharpest pace of job creation in three months. Purchasing activity among construction companies also increased, a sign more businesses are confident about the business outlook.

“Construction output growth succumbed somewhat to the recent wet weather, with temporary disruptions from heavy rainfall most acute for house building activity in February,” wrote Markit senior economist Tim Moore in a press release. “While some froth has come off overall construction growth in February, the latest data showed that job creation picked up to a pace rarely seen since the summer of 2007.”

The UK construction sector, having been devastated by the 2007-09 financial crisis, has been recovering steadily over the past year. The government’s Help to Buy program, combined with record low interest rates and falling unemployment, have spearheaded the construction sector’s rebound. According to Markit, 59 percent of construction companies expect output to rise in the year ahead.

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