UK construction output sees sharpest rise since 2007

Gurjit Degun
4 February 2014

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4 February 2014 | Gurjit Degun

UK construction output has risen at its quickest since August 2007, with housing activity increasing at the fastest pace for more than a decade.

The Markit/CIPS UK Construction Purchasing Managers' Index (PMI) hit 64.6 in January, up from 62.1 in December, above the 50 baseline for the ninth successive month.

Commercial building work and civil engineering activity also increased sharply during January, and in each case the latest expansion was the steepest since the summer of 2007. Volumes of new work received by UK construction companies increased for the ninth successive month too.

Confidence for the year ahead was the most positive since September 2009, which led to more hiring last month. The PMI has recorded higher levels of employment in the construction sector for eight consecutive months – the longest continuous period of job creation since early 2008.

Tim Moore, senior economist at Markit, said: “While input cost inflation eased in January, there were again signs that some suppliers are struggling to adjust to greater demand for construction materials. Vendor lead-times were lengthening even before the surge in construction output began last year, and now firms are reporting that cutbacks to capacity have caused supply bottlenecks as demand picks up across the sector.”

CIPS group CEO David Noble added: “As the industry’s lifeblood, suppliers are still recovering from the recession, and until they get back to full capacity, the continued lengthening of delivery times may become a restraining force on the sector in the coming months.”

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