02 September 2003 | Gareth Mytton
Growth in the UK construction sector accelerated to a sixteen-month high in August, according to the latest PMI report.
The headline purchasing managers' index - a composite indicator of business activity compiled by CIPS and NTC Research - rose to 56.3 in August, from 55.9 in July. The PMI has now been above the 50 figure that indicates no change on the previous month for nearly six years.
Commercial construction activity picked up sharply from recent months, at 53.8, in response to fuller order books and the easing of recent global uncertainty. Strong demand for houses pushed the housing index up to 60.4 from 56.8 in July. Civil engineering activity also rose, at 55.2.
The new orders index slipped slightly to 59.2, but a significant proportion of firms still secured new business.
They also took on more staff and made greater use of subcontractors, but as the growth in activity was quicker, companies appear to be increasing productivity.
Delivery times lengthened as purchasing activity increased, although the rise in input prices (53.7) was the weakest since January 1999. More than 90 per cent of companies said prices were unchanged on the month.
They were also extremely confident that business would increase in the coming year, with the future business activity index rising to 77.2.