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Construction growth increases

Construction growth increases

Britain's construction sector saw growth increase in February, a new survey has indicated. 

The Purchasing Managers Index (PMI) survey by Markit and the Chartered Institute of Purchasing and Supply (CIPS) gave a reading of 52.5 for the month, up from 52.2 in January. It was the sixth month in a row of growth - marked by any reading over 50 - and thus indicated a continuation of the recovery after the post-Brexit slump. 

Civil engineering was the greatest contributor to the upward trend, with this area of activity strengthening while housebuilding grew at its weakest level for six months. Commercial construction actually declined, with this ensuring the level of growth remained below the best rating of the post-Brexit rebound, the 54.6 seen in December. 

The overall level of confidence remained high, with 48 per cent of respondents forecasting growth in the next 12 months and only 13 per cent predicting a downturn. While this was less upbeat than January, it was better than any month in the second half of 2016. 

However, there were some problems, not least the second fastest rise in input costs since August 2008, a consequence of the high import prices resulting from the weakness of the pound. Director of customer relationships at CIPS Duncan Brock called this a "brutal rise" in costs that could hamper efforts to bolster housebuilding in the next few months. 

Commenting on the overall  situation, senior economist at IHS Markit Tim Moore said: "February’s survey data highlights that the UK construction sector has rebounded from its post-referendum soft patch but remains on a relatively slow growth trajectory. Weaker momentum in the house building sector was a key factor weighing on construction growth, alongside a renewed fall in work commercial projects."

The construction PMI reading was the only one to show an improvement on January. Manufacturing and services both indicated continued growth at 54.6 and 53.3 respectively, but these were both weaker than the previous month's results.

Image: iStock/monkeybusinessimages

 

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