This high output was reported in a recent report by Markit/CIPS, where the Purchasing Managers’ Index (PMI) for construction reached 64.0, climbing up from 62.4 in July. This figure is way above the magic 50 mark which signals month-on-month growth in activity, and also massively exceeds the initial forecasts made by the Reuters poll of economists.
Although activity in the civil engineering sector increased at its strongest pace since March, it was the property market which saw the fastest rise in construction activity in August. This boom was put down to recent government programmes which have boosted demand for homes such as the ‘Help to Buy’ scheme.
However, construction activity was soaring across all sectors with output in the commercial world nearly equalling the fastest ever output recorded in the summer of 2007. Survey respondents cited improving economic fundamentals and a corresponding rise in clients’ willingness to commit to new construction projects, as major factors behind this soaring monthly output across all sectors.
August was the 16th consecutive month where survey respondents reported strong gains in incoming new work. As a result of this increased business, companies recruited more and more staff, as job creation rates nearly reached the record-breaking heights seen in the previous month of July. This statistic means that employment has now grown for 15 consecutive months, the longest period of sustained growth since 2006-2008.
This strong month has left survey respondents in an increasing positive mood regarding the future of the industry. In fact, 59% of all those surveyed expect a rise in businesses activity in the upcoming year, while just 7% forecasted a decline.
Tim Moore, Senior Economist at Markit and author of the report, said: “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.”
The data for the report was compiled from replies to questionnaires made by purchasing executives from over 170 UK construction companies.
To read the full report click here.