Housebuilding boosts UK construction recovery

The Markit/CIPS UK Construction Purchasing Managers’ Index registered 53.2 in September, up from 49.2 in August and above the 50.0 mark which represents growth in the industry for the first time in four months.

Buyers also reported the fastest rise in new orders for six months as residential work led the recovery.

Tim Moore, senior economist at IHS Markit and author of the Markit/CIPS Construction PMI, said: “UK construction companies moved back into expansion mode during September, led by a swift recovery in residential building from the three-and-a-half year low recorded in June.

“Resilient housing market conditions and a renewed upturn in civil engineering activity helped to drive an overall improvement in construction output volumes for the first time since the EU referendum.

“A number of survey respondents noted that Brexit-related anxiety has receded among clients, although it remained a factor behind the ongoing decline in commercial building work.

“Construction firms appear reasonably optimistic about the near-term outlook, with confidence linked to the fastest rise in new orders since March and a more upbeat economic news flow in general.”

A solid rebound in residential activity, the strongest recorded since January, was the key factor boosting overall construction output. A number of firms cited resilient demand for residential building work and generally improving market conditions.

Construction companies also pointed to a renewed rise in civil engineering activity, with the pace of expansion the fastest since March, though commercial activity decreased for the fourth month running, which is the longest period of sustained decline since early-2013.

The September figures also marked greater contractor confidence, with 45 per cent of those surveyed forecasting a rise in output before the year end, with only 9 per cent anticipating a reduction.