Britain’s construction sector stages recovery

There has been growth in both house and building construction. Picture: Gareth Easton
There has been growth in both house and building construction. Picture: Gareth Easton
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A rise in house building activity and commercial work has helped drag Britain’s construction sector back from a seven-month low.

The latest Markit/Cips purchasing managers’ index for the industry – released yesterday – revealed a reading of 57.8 for December, up from November’s low of 55.3 and ahead of economists’ forecasts. Any reading above 50 indicates growth.

The survey noted that UK construction firms had ended 2015 with a “robust” level of overall business activity, adding that commercial building increased on the back of improving UK economic conditions, leading to new orders.

Housing activity also showed strong growth, picking up from a 29-month low in November.

However, the report cautioned that the overall rate of expansion remained slightly weaker than seen on average over this period.

Tim Moore, senior economist at research outfit Markit, said: “UK construction companies finished 2015 in a positive fashion, as overall output growth recovered from November’s seven-month low.

“Commercial building was the main engine of growth, with this area of activity expanding at the strongest pace since autumn 2014.

“There was also a rebound in house building activity in December, but momentum was still much softer than the post-crisis highs achieved during 2014.”

Moore added that although civil engineering work was marginally down last month, the sector is likely to pick up as new building projects are expected to follow UK winter flooding in Scotland and the north of England.

IHS Global Insight economist Howard Archer said it was a “reassuring survey”.