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UK construction growth improves

UK construction growth improves

The UK construction sector enjoyed a better month in April, after growth increased compared with March, a new survey has found.

With a reading of 53.1 in April compared with 52.2 in March, the Markit/Chartered Institute of Procurement & Supply (CIPS) UK Construction Purchasing Managers' Index (PMI) provided clear evidence that activity in the sector picked up, even though the March figures still represented growth as was above 50.

It was the largest month-on-month increase in construction activity so far in 2017, with civil engineering in particular doing well; it enjoyed its fastest expansion in 13 months. Housebuilding growth also improved and these factors led to a renewed increase in the buying of raw materials by purchasing managers.

The improvement also led to an increased demand for skilled labour, with more pressure in areas with skill shortages and greater demand for subcontractors. Overall, the rate of employment growth was at its highest since May 2016.

Overall, the only downside was that the level of growth was still less than in the boom period in 2014 when Britain finally started to emerge strongly from the economic downturn.

The current situation has been influenced by doubts over the future after Brexit, but overall, respondents remained upbeat. 49 per cent said they expect to see growth over the next 12 months, whereas only ten per cent expected to see a decline. This was slightly less upbeat than March, but still far better than the post-referendum trough seen last July.

Commenting on the survey findings, CIPS director of customer relationships Duncan Brock said: "With the biggest rise in new orders since the beginning of the year, the sector is in a strong pre-election position buoyed up by a hardy UK economy and strong client confidence. The housing sector offered up the best news recovering from last month’s minor blip and building on its strongest performance since the end of last year."

The improvement in construction echoes upturns in the manufacturing and services PMIs. the manufacturing sector reading was up from a four-month low of 54.2 in March to a three-year high of 57.3 in April, while the services PMI rose from 55 to 55.8.

Image: iStock/monkeybusinessimages


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