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Home Latest News Construction output enjoys post-election growth

Construction output enjoys post-election growth

The upturn in construction activity was attributed to more stable conditions and growing confidence in the wake of May's General Election, in which the Conservatives won a majority.

According to the latest Markit/CIPS Purchasing Managers' Index (PMI), growth in the construction sector rose to 58.1 in June, notably higher than the growth rate of 55.9 witnessed in May. A reading of anything above 50 in the monthly PMI indicates expansion.

The growth is expected to continue over the coming year too, as Markit's research found that confidence in the sector about the next 12 months was at its highest level for 11 years.

Tim Moore, senior economist at Markit, commented: "Construction companies experienced a growth rebound and surge in business confidence at the end of the second quarter."

He added that the recent rise in construction optimism, which has sparked faster than anticipated growth in the industry, was "partly down to relief that pre-election uncertainty has now passed".

The greater confidence and stability has also resulted in construction firms looking to expand their workforces, with the research also finding that companies are hiring staff at the fastest pace in six months.

Markit stated in its monthly report that home building was the strongest part of the construction sector last month, with improving demand and full order books helping to buoy the sector across the board.

The positive news delivered in the Markit survey came just days after the Office for National Statistics (ONS) revealed that the construction industry had performed much better than it had predicted; the ONS revised UK economic growth for the three months to March up to 0.4 per cent from an original estimate of 0.3 per cent, based on stronger than previously calculated activity in the construction industry.