Building growth picks up in UK

A pick-up in house building helped growth in Britain’s construction sector speed up slightly last month, but the expansion remained weaker than last year’s robust rebound, an industry survey showed yesterday.

The CIPS/Markit construction Purchasing Managers’ Index (PMI) rose to 57.3 in August from 57.1 in July, indicating solid growth but below the 57.5 forecast in a Reuters poll and the levels of more than 60 regularly reached in 2014.

“UK construction companies remained on a reasonably strong growth footing in August, helped by a sustained recovery in both residential and commercial building activity,” Tim Moore, an economist at survey compiler Markit, said.

The fastest-growing construction sector was house-building, and commercial work also rose strongly, while civil engineering projects remained in the doldrums.

The Markit survey has painted a more bullish picture this year than official figures, which showed construction rose by just 0.2% in the three months to June.

Britain’s construction sector picked up sharply in early 2014, bolstered by rising property prices and government measures to promote house-building, but flagged towards the end of last year as tighter lending rules slowed price growth eased.

The survey showed construction firms were bullish about the future, with most firms expecting to be busier over the coming year, while only one in 20 expected a contraction.

Hiring continued at a rapid pace, and a fall in oil prices slowed the increase in raw material costs.

The rates paid to subcontractors rose at the slowest pace in more than a year.