UK construction industry building bridges and mending gaps
A new survey has shown that an increase in housebuilding has dramatically boosted the UK construction industry.
The Markit/CIPS Purchasing Managers Index (PMI) showed that the industry grew at its fastest past for four months in June (2014), rising from 60.0 in May to 62.6.
Reports also show that construction companies also hired new employees at the fastest rate since 1997 while housebuilding also saw the largest expansion in activity and growth in orders since the beginning of the year.
Markit said accelerating house prices, low interest rates and strong demand continue to encourage housebuilders to launch new housing developments.
Markit senior economist Tim Moore, said:
“[This] represents a remarkable yardstick of progress as the sector looks to recover the ground lost over the past seven years”.
New data shows that the growth in UK’s construction industry rose by 1.5% in the first three months of 2014 and was 6.7% higher than a year earlier, which is the largest annual rise in three years.
The construction industry contributes a relatively small 6% to economic growth but David Tinsley, UK economist at BNP Paribas, said the figures demonstrated a “very solid month” for the economy.
“Particularly marked in the release was another acceleration in employment gains, with the index rising to its highest level in 17 years.”
Howard Archer, chief UK and European economist at IHS Global Insight, said the construction figures added to recent data that suggested economic growth in the second quarter was even stronger than the 0.8% seen in the first three months of the year.
Source: BBC News