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Housebuilding continues to lead construction upturn

Construction activity expanded at its fastest rate for eight months in September, with housebuilding contributing to the robust performance.The Markit/Chartered Institute of Purchasing and Supply Purchasing Managers' Index stood at 64.2 last month, up slightly on the 64.0 figure recorded in August.This represented the steepest expansion of construction output since January and the second fastest witnessed over the past seven years. While housing activity remained the fastest-growing area of construction, the rate of expansion eased to its weakest since May.Tim Moore, senior economist at Markit, said: "Housing activity remains the brightest spot in the construction sector, but its outperformance has started to fade. "Moreover, residential construction continues to see the most intense pressures on supply chains and skilled labour availability."The sharp rise in the index's headline figure was driven by rapid expansion in both commercial and civil engineering activity growth during September.Commercial activity rose at the strongest pace since January, while civil engineering enjoyed its quickest expansion for six months.Improved economic performance was cited as the primary reason behind the latest robust set of figures, leading to a greater willingness for clients to spend. Commercial development activity may have been boosted by a ripple effect from ongoing housing market strength.However, despite these promising signs, there was a moderation in job creation across the construction sector from July's survey-record high. Subcontractor usage increased for the fourth month in succession, with a corresponding squeeze on subcontractor availability. There were also problems relating to staff availability and supply chain pressures, with bottlenecks being reported, a lengthening of delivery times and low stocks of bricks and blocks at suppliers.Levels of optimism in the sector remain high, with more than half (54 per cent) of respondents expecting a rise in business activity over the next 12 months and only 12 per cent expecting a fall. However, the degree of positive sentiment has eased since August and is now at its lowest for almost a year. 

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