UK construction PMI hits seven-month high in September

Construction output in the UK accelerated to a seven-month high in September, according to the latest Markit/CIPS survey published on Friday.

The headline seasonally-adjusted Markit/CIPS Purchasing Managers’ Index climbed from 57.3 in August to 59.9 last month, well above the 57.5 analysts had expected and the long-run survey average of 54.7.

Markit said house building remained the best performing category of construction activity in September, as it registered the strongest rate of expansion for 12 months, which some attributed to the launch of development projects that had been delayed earlier in the year.

Commercial construction activity also accelerated in September, with the pace of growth surging to a seven-month high, while civil engineering activity climbed for the fifth consecutive month as the rate of expansion climbed to its fastest since February.

Volumes of new work continued to increase last month, although the pace of growth was the slowest over the last five months and considerably weaker than the post-crisis highs recorded in 2013 and 2014, Martkit says.

However, construction companies remain upbeat about their prospects for output growth over the next 12 months, with 52% of the respondents expecting an upturn in business activity, while 6% forecast a contraction.

“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,” said Markit’s senior economist Tim Moore.

“While the latest survey provides positive news on construction output, jobs and supply-chains, there was a warning light flashing in terms of total new orders.

“Construction companies have recorded a steady slowdown in new business growth from June’s post-election peak and the latest upturn was the second-slowest since mid-2013.”