British Construction Blossomed in Summer 2015

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British Construction Blossomed in Summer 2015


Britain’s construction sector has grown at a healthy pace during August, thanks to a rise in commercial and residential projects.

The monthly Purchasing Managers Index (PMI), from the Chartered Institute of Purchasing and Supply (CIPS), rose from 57.1 in July to 57.3 in August, fuelling hopes that economic growth into the third quarter has remained strong.

This figure was well above the 50 mark which signals expansion rather than contraction.

Tim Moore, an economist at survey compiler Markit, said of the figures: “UK construction companies remained on a reasonably strong growth footing in August, helped by a sustained recovery in both residential and commercial building activity.”

However, growth remained below the 57.5 mark forecast by economists, and the 60 points the PMI hit in 2014 – indicating that growth is solid but slow.

House-building was the fastest-growing area of the construction sector, according to the survey, while prospects for the commercial building also improved.

Positive results in those sectors offset a slightly weaker performance in civil engineering.

“Survey respondents widely linked the latest upturn to improving economic conditions and strong demand from private sector clients,” the Markit report on the survey stated.

Howard Archer, of consultancy IHS Global Insight, said that the results will likely please the government, as the survey reflected a more positive picture than official figures which showed a mere 0.2 per cent rise in construction in the three months to June.

“The improvement in housebuilding in August reported by the purchasing managers after a dip in July will be welcomed by the government, which is currently prioritising the sector to deal with the UK’s serious housing shortage,” he told the The Guardian.

If official figures reflect the positive news from the survey, construction could make a stronger contribution to economic growth in the third quarter of this year, he added.

Thanks to rising property prices and government measures to boost house-building projects, the UK’s construction sector has become healthier since 2014, in the wake of the recession.

As a result, companies across the construction sector with an optimistic outlook for the future have taken on more staff and put in new orders, the survey showed.

Commenting on the report, David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said: “The construction sector picked itself up a little more this month [August] as overall activity stepped up. Housing remained the strongest driver of growth in addition some reported new impetus in the commercial sector.

He added: “The rise in the level of permanent posts and employment generally rising for the last 32 months, confirmed an optimism displayed by more than half of the survey respondents.”


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