Construction growth gathers pace

3 October 2004
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04 October 2004 | Gareth Mytton

UK construction activity rose at the fastest rate since April last month, according to September's purchasing managers' index (PMI) report.

The PMI - a composite indicator of overall sector conditions, in which 50 indicates no change on the previous month - rose to 56.8 from 55.8 in August.

Activity rose in all three sectors of the construction economy. Housebuilders enjoyed accelerating growth for the first time in three months, with the housing activity index rising to 57.

The increasing health of the wider economy helped the commercial activity index up to 57.6, while trade picked up in the civil engineering sector for the first time since April, at 51.6.

The quantity of purchases index eased to 54.2, while lead times lengthened at almost the same rate as August. Purchasers reported shortages, in particular of steel.

Input price inflation was again severe, at 73.8, owing to the knock-on effects of higher oil prices on fuel and energy bills and shortages of various building materials.

Nearly three out of 10 companies said order books had grown. The new orders index rose to 60.5, which also led to companies taking on more staff (55.2).

The use of subcontractors accelerated, at 54.3, as did their rates (53.5).

• Coverage of previous months' UK construction, manufacturing and services PMI reports is available at http://www.supplymanagement.com/pmi.

SMoct2004

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