UK construction companies maintained a rapid pace of expansion in March 2014, mainly due to an increase in housebuilding. The Markit/CIPS Construction Purchasing Managers’ Index (PMI), a survey of around 170 UK construction companies, showed that optimism had reached its highest level since January 2007.
The Markit/CIPS Construction PMI fell slightly to 62.5 in March 2014 from 62.6 in February 2014; however, this remained far above the 50 mark, which indicates growth. The survey revealed the optimism of British builders during the month and showed that companies were hiring staff at the fastest pace recorded in four months. Housebuilders saw the fastest rate of expansion in March, rebounding after bad weather in February that resulted in a wave of flood relief projects.
The financial crisis of 2007 – 2009 had a huge impact upon the construction industry, which accounts for around 7% of the UK economy. However, a combination of record low interest rates, taxpayer-backed programmes, housing schemes and falling unemployment has resulted in recovery over the past year.
Tim Moore, a senior economist at Markit, stated that the rise in residential construction was one of the sharpest recorded in the past ten years. This was helped by strong demand for new development projects and supportive funding conditions. Expectations for construction growth for 2014 have reached their highest since the start of 2007 and an increase in employment rates across the sector is evident. However, Moore further commented that supplier capacity could potentially pose a problem in the upcoming months.
Edited from various sources by Rosalie Starling