September 04 ,2014 | by Hari Srinivasan

UK construction sector experiences 7-month high

UK construction sector

The UK construction sector continues to deliver outstanding results, with the latest Markit/CIPS Purchasing Managers’ Index (PMI).

The construction boom in Britain is substantial, with the rise in output between August and July – from 62.4 to 64.0 – the largest monthly increase one of the biggest ever recorded during the survey’s 17-year history.

It is also the largest monthly rise since January of this year. Attributing to these successes include another marked rise in house building, and upsurges in commercial activity and civil engineering.


Markit said that this is indicative of a “broad-based recovery”, which is gaining traction courtesy of a growing demand for residential property and increased spending on office space.

“A broad-based upturn in construction demand has created a boom in job creation this summer, as construction companies look to replace capacity lost in the aftermath of the recession,” survey author Tim Moore was quoted by Reuters as saying.

Looking ahead, the construction sector looks set to continue delivering stellar results. More so, according to the PMI, the sector will be contributing significantly to wider economic growth over the next few months.

However, there are concerns that the unexpected and elevated pace of growth is beginning to have an impact on supply, with “the availability of materials and subcontractors deteriorating at record rates”.

Chris Williamson, chief economist at survey compilers Markit, said that beyond the foreseeable future it is difficult to gauge what kind of an impact this will have.

“The concern is that shortages of both raw materials and suitable subcontractors could start causing growth to slow, and could push up inflationary pressures within the sector,” he said.


UK construction contributes nearly £90 billion to the UK economy, which is 6.7 per cent of its total output.

Needless to say the government considers it as a key entity, describing construction as being where it has a “competitive edge”.

It has laid out a vision for where the industry will be in 2025, which includes being known for having a talented and diverse workforce; an efficient and technology advanced orientation; and a sustainable approach to everything it does.

Hari Srinivasan

Hari is the LSBF Blog's News Editor. He manages the editorial content on the blog and writes about current affairs, SME, entrepreneurship, energy, education and emerging market news.

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