UK construction sector grows for second month

Activity in the UK construction industry grew at the fastest pace in two and a half years in April, driven by growth in both the residential and commercial property sectors.

The construction Purchasing Managers’ Index (PMI) jumped sharply to 58.2 from 53.1 in March, where anything above 50 indicates expansion. It took the PMI to the highest level since September 2007 and reflected a second consecutive month of growth.

“It is encouraging to see the construction sector show signs of recuperation for the second month running and suggests that the whole UK economic recovery has real substance,” said David Noble, chief executive at the Chartered Institute of Purchasing & Supply, which publishes the survey with Markit.

Within the sector house building expanded at the fastest rate, rising to 60.3 on the index from 57.3. Activity in the civil engineering sector continued to contract in April, but at a slower pace than March.

Howard Archer, chief UK economist at IHS Global Insight, said the sharp improvement in the construction PMI raised hopes that the “sector is now on the mend after suffering a deep, extended recession. It also suggests that construction output will expand in the second quarter and contribute modestly to GDP growth.”

It was not all good news however as employment in the sector fell again in April, for a 23rd consecutive month, although at a slower pace compared with March.

Mr Archer warned the sector was in for a challenging time after the election. “It is likely to be hit significantly by the next government’s need to rein in its spending for an extended period as this is bound to hit expenditure on infrastructure and public buildings.”

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