Construction gets Brexit boost as output grows at fastest pace for nine months with a raft of new orders
Despite predictions leaving EU would hit the economy manufacturers are also seeing some of the fastest rates of expansion in years
CONSTRUCTION output grew at its fastest pace for nine months in December with a raft of new orders spurred on by the weak pound.
Despite predictions Brexit would hit the economy manufacturers are also seeing some of the fastest rates of expansion in years.
The closely watched Markit/CIPS UK Construction purchasing managers’ index (PMI) rose to 54.2 last month, up from 52.8 in November and above economists’ expectations of 52.6.
A reading above 50 indicates growth.
The better-than-expected performance was driven by a rebound in business conditions, with new order growth hitting an 11-month.
It comes after separate PMI figures on Tuesday showed manufacturing output unexpectedly leap to a two-and-a-half-year high in December thanks to an exports boost from the plunging pound.
Tim Moore, senior economist at IHS Markit, said the PMI data showed the construction industry delivered a “solid rebound” in the final quarter of last year.
“All three main areas of construction activity have started to recover from last summer’s soft patch, but in each case growth remains much weaker than the cyclical peaks seen in 2014,” he said.
“Housebuilding remains a key engine of growth for the construction sector, with the latest upturn the fastest for almost one year.
“Meanwhile, commercial activity was the weakest performing category in December, reflecting an ongoing drag from subdued investment spending and heightened economic uncertainty.”
The PMI report said housebuilding was the best performing area of the industry, with housing activity delivering its fastest expansion since January, and recruitment grew at its quickest rate since May.
Nearly half of the firms surveyed for the report expect business activity to step up over the next year, with business confidence hitting a three-month high.
It comes after the UK economy was unexpectedly revised up last month, with gross domestic product (GDP) expanding 0.6% in the third quarter, up from a previous estimate of 0.5%, according to official figures.