British construction growth at 21-month high in March
A gauge of building activity rose to 56.7 from 54.3 in February, Markit Economics Ltd and the Chartered Institute of Purchasing and Supply said in a report yesterday.
The median forecast in a Bloomberg News survey of nine economists was 53.4. A reading above 50 indicates expansion.
Markit said confidence at companies increased to a 22-month high.
The construction report follows a survey on Monday showing manufacturing grew at the fastest pace in 10 months in March.
The British Chambers of Commerce said Britain has probably avoided a second recession, though the government needs to do more to stoke a “weak” recovery.
“The good weather appears to have led to a surge in demand for construction projects in March, adding to the recent flow of good news which suggests the economy will have skirted a recession,” said Chris Williamson, chief economist at Markit. “The particularly encouraging news is that the improvement in confidence is generating more jobs.”
The report showed all construction categories — housing, commercial and civil engineering — registered growth in March.
Employment increased, which Markit said reflected growth in new orders and output at companies.
Britain’s economy contracted 0.3% in the fourth quarter as the European debt turmoil constrained services. The British Chambers of Commerce said the economy probably expanded 0.3% in the first quarter.
Markit said input prices faced by British construction companies rose “sharply” in March, driven by higher costs for raw materials such as oil.
The Bank of England expanded its bond-purchase programme by £50bn (€60bn) in February to £325bn to support the economic recovery.
Officials will start a two-day policy meeting today, and will probably maintain the target for purchases at that level while holding their benchmark interest rate at 0.5%. The bank will announce the decision tomorrow.
— Bloomberg
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