July signalled the steepest rise in residential building activity since November 2003, according to the Markit/CIPS UK Construction Purchasing Managers’ Index (PMI).
The steep rise in housing activity has been attributed to favourable funding conditions and strong demand for new housing starts, according to survey respondents.
The seasonally adjusted Markit/CIPS UK Construction PMI registered 62.4 in July, down slightly from 62.6 in June but above the neutral 50.0 mark for the fifteenth successive month.
Higher levels of construction output were supported by a further steep improvement in new business intakes during July. New orders have increased in each month since May 2013, and survey respondents linked the latest expansion to favourable domestic economic conditions and greater confidence among clients.
Tim Moore, senior economist at Markit and author of the Markit/CIPS Construction PMI, said:
“July’s figures suggest the UK construction sector is enjoying its strongest cyclical upswing since the global financial crisis, while a new record rise in employment highlights that construction firms are increasingly confident about the sustainability of the upturn.
“All three core categories of construction activity saw historically steep improvements in output levels through July, unsurprisingly led by a resurgent house building sector.
“Overall the survey adds to the view that construction companies have performed impressively so far this summer, which raises the likelihood that the sands of time could wash away the construction weakness seen in the preliminary second quarter GDP release.
“Looking ahead, a pressing concern for construction companies is the availability of materials and suitably skilled labour to support the recent growth streak. Cuts to supplier capacity have ushered in the worst period of input delivery delays since the survey began in 1997, while this summer has also been notable for construction firms reporting near-record increases in rates commanded for sub-contracted work.”