Growth across British construction companies rebounded unexpectedly in January after a slow end to 2014, boosted by improving order books and rising confidence, a business survey showed.
The Markit/CIPS construction purchasing managers’ index (PMI) rose to 59.1 from December’s 17-month low of 57.6, topping all forecasts and far above the 50 mark that signifies growth. While official data last week showed construction output shrank at the end of last year at the fastest pace since 2012, the PMI pointed to better months ahead.
Growth strengthened across housing, commercial and civil engineering as new orders piled in at the fastest rate in three months. Optimism about the next year increased for the first time in three months, albeit from only a little from December’s 16-month low.
“In short, the peak speed of the construction recovery seems to be over, but reports of its death have been greatly exaggerated,” said Tim Moore, senior economist at Markit.
Construction, which accounts for just over six per cent of Britain’s economy, was hit hard by Britain’s recession following the global financial crisis, and the sector’s output is still around eight per cent below its level in early 2008.
With oil prices more than halving over the last six months to below $50 a barrel, prices paid by construction companies for raw materials rose at the slowest pace since April 2013.
Construction companies took on staff at the slowest pace since December 2013, echoing a similar survey of manufacturerson Monday that also showed jobs growth slowing.