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Construction output edges upwards in August

Construction output has experienced a “strong and accelerated rise” with the residential market seeing the fastest expansion.

The Markit/CIPS UK Construction Purchasing Managers’ Index for August grew to 57.3, up from 57.1 in July.

The latest reading is ahead of the survey’s average of 54.6 and represents the longest period of sustained growth for over seven years.

Residential activity remained the fastest growing sector in August, but there was also a rise in commercial work, which reached its highest level since March.

In contrast, civil engineering experienced a significant slowdown, with work rising at its slowest rate for three months.

Respondents to the survey revealed that input cost inflation eased to a four-month low, helped by rising levels of supplier capacity, as well as lower fuel and energy costs.

Strains on raw material availability also started to subside, while the number of new orders witnessed a solid expansion – although the rate of growth eased to its slowest since May.

53 per cent of respondents anticipated a rise in output over the coming year, while only 5 per cent forecast a decline.

Mr Moore described construction as a “strong engine of job creation, as permanent staff numbers and sub-contractor demand both picked up over the month.

Staff hiring is at a nine-year high, with the current period stretching to 27 consecutive months.

David Noble, group chief executive officer at the Chartered Institute of Procurement and Supply, added: “The construction sector picked itself up a little more this month as overall activity stepped up.

“Capacity restraints limited some companies in their determination to actively chase new business, using their resources to fulfil current commitments.

“With some doubt creeping in around the sustainability of the strength of the global economy, any rise in UK interest rates is unlikely to be any time soon, so growth rates are not stymied.

“With consistently lower input prices such as for oil, the sector was provided with a much-needed additional buffer.”

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