Economy gets boost from construction sector

Activity in the construction sector grew at its fastest pace for four-and-a-half years during March, further raising hopes that the UK may avoid a double-dip recession.

Figures from the Chartered Institute of Purchasing & Supply and Markit showed that the purchasing managers’ index (PMI) rose to 56.7 last month from February’s 54.3, with any reading above 50 indicating growth.

The PMI hit its highest level in 21 months, beating economists’ forecast for a slight fall and indicating that the Bank of England may not need to pump more money into the economy through its quantitative easing programme.

Howard Archer, chief UK and European economist at IHS Global Insight, said: “Not only did the construction purchasing managers’ show activity improving to a 21-month high in March, with growth occurring in all sectors, but the more forward-looking elements of the survey bode well for activity in the near term at least.

“Most encouragingly, the new orders index was at its highest level since September 2007 while business expectations were at a 22-month high.”