UK construction output growth at four-month high as job creation soars

Gurjit Degun
2 July 2014

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2 July 2014 | Gurjit Degun

Last month saw the fastest expansion in the UK's construction activity since February and employment growing at its steepest pace since the Purchasing Managers' Index (PMI) began for the sector in April 1997.

The seasonally adjusted Markit/CIPS UK Construction PMI recorded 62.6 last month. The index rose from the seven-month low of 60 in May, and has now been above 50 - indicating expansion - for 14 consecutive months.

New work received by UK construction companies increased sharply in June and at the fastest pace since January. This led to a rapid increase in staffing, with the rate of job creation accelerating to the quickest since the survey began.

Residential construction continued to be the best performing area in June, as the latest rise was the fastest since January. Commercial building activity also increased at the quickest pace for five months. But civil engineering only recorded moderate growth, with its latest expansion the least marked since September 2013.

Tim Moore, senior economist at Markit, said: “A key recent development across the construction sector has been the return to pre-recession rates of job creation, following a prolonged period of falling payroll numbers and cuts to operating capacity.

“Moreover, the latest rise in construction employment represents a remarkable yardstick of progress as the sector looks to recover the ground lost over the past seven years.”

David Noble, group CEO, CIPS, added: “While the headline figures this month painted a positive picture, let’s not forget about the underlying pressures on building materials and manpower at supplier levels. Delivery times continued to lengthen a great deal and prices were pushed up. Pressure on suppliers needs to be watched if the sector wants to maintain a steady growth trajectory.”

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