Housing demand fuels building boom

1 October 2003
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02 October 2003 | Gareth Mytton

Activity in the UK construction sector grew in September at the fastest rate since July 2001 as the housing boom continued, according to the latest PMI report.

The purchasing managers' index - a composite indicator of business conditions published by CIPS and NTC Research - rose to 56.9 in September, to remain well above the 50 figure that indicates no change on the previous month.

Housebuilders enjoyed a further strong expansion in activity, as the index rose to 61.6. Growing client confidence fuelled a rise in activity for commercial builders (56.1), but the expansion in civil engineering slowed sharply.

Buoyant conditions in the sector maintained robust growth in new orders (58.6), which led to builders taking on more staff to meet current and anticipated business.

Construction companies made also more use of subcontractors in September than in August, and their availability and quality fell slightly. However, subcontractors' rates rose only marginally.

Other input prices also rose (56.9) as sterling fell against the euro and demand grew for raw materials. Only diesel fell in price on the month, while 11 other items were more expensive.

Quantities of purchases rose in line with rising workloads, and suppliers' delivery times lengthened.


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