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Construction output growth accelerates to a seven-month high

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September data pointed to a further rebound in output growth across the UK construction sector, supported by faster rates of expansion in all three categories of activity monitored by the survey.

Greater workloads and positive sentiment regarding the business outlook contributed to a sharp increase in staffing levels during September. However, new business growth continued to ease from June’s recent peak, with the latest upturn in new work the weakest for five months. Meanwhile, construction companies indicated the least marked lengthening of suppliers’ delivery times since November 2010, which provided further evidence that supply chain pressures have subsided in recent months.

At 59.9 in September, up from 57.3 in August, the headline seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index® signalled a sharp and accelerated expansion of overall business activity. Moreover, the latest reading was well above the long-run survey average (54.7) and pointed to the fastest increase in output levels since February.

House building remained the best performing broad category of construction activity in September. The latest expansion of residential building was the strongest for 12 months, which some survey respondents attributed to the launch of development projects that had been delayed earlier in 2015. Commercial construction activity also rose sharply in September, with the pace of growth accelerating to a seven-month high. Meanwhile, civil engineering activity increased for the fifth consecutive month and the rate of expansion picked up to its fastest since February.

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI®, said: “Construction firms enjoyed a strong finish to the third quarter of 2015, as a sustained rebound in new development projects continued to have an impact on the ground. Moreover, September data suggests that the UK construction sector is still experiencing its most intense cycle of job hiring for at least 15 years, and consequently skill shortages remain a dominant concern across the industry.”

Edited from source by Joseph Green. Source: Markit Economics 

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