Construction 'leaving dark days of recession behind'

2 September 2013

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3 September 2013 | Paul Snell

The UK construction sector expanded for the fourth month in a row, according to the latest Purchasing Managers’ Index (PMI).

The Markit/CIPS UK Construction PMI recorded a figure of 59.1 in August, above the 50 benchmark indicating growth, and at a quicker pace from the reading of 57 posted in July.

This was the strongest rate of expansion seen since September 2007, boosted by positive performance in each of the industry’s sub-sectors, residential, civil engineering and commercial activity.

The growth was attributed to greater spending from clients and on public sector infrastructure. The sector was also boosted by higher demand for housing. The new work also raised expectations for the future.

The rise in activity also led to more purchasing across the industry. The growth in input buying was the fastest since March 2012. But this has put pressure on suppliers, with delivery times stretching to their longest since June 2007.

“The industry recorded the fastest pace of growth since 2007 in August, leaving the dark days of recession behind,” said CIPS CEO David Noble. “This new direction brings challenges, not least the prospect of additional work and insufficient capacity to meet demand. How the sector navigates these tensions and manages the supply chain could come to define its performance over the coming months.”

Tim Moore, senior economist at Markit, said: “New public sector infrastructure spending looks to have started making an impact on the ground and this was a contributory factor behind the sustained construction sector job creation seen in August.”

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