Business

UK construction growth fastest since August 2007

  • 3 December 2013
  • From the section Business
Housebuilding in east London
Image caption Houses are going up at their fastest rate for 10 years according to Markit

UK construction picked up speed in November with output rising at the fastest pace in more than six years.

The Markit purchasing managers' index (PMI) for the sector rose to 62.6 last month, up from 59.4 in October.

The higher the reading above 50, the stronger the growth in activity.

The reading comes a day after a related survey showed manufacturing output also strengthening, giving the chancellor a positive background against which to deliver Thursday's Autumn Statement.

George Osborne is due to provide his update on the government's economic plans.

Tim Moore, senior economist with Markit, said: "Construction activity continues to spring back to life during the final months of 2013."

However, he said the pick-up was being built on a low base, after years of shrinkage or tepid growth resulting from the credit crisis that was sparked in 2007.

Curtailed

The Bank of England's schemes to boost mortgage lending gave housebuilders a shot in the arm.

Markit said domestic building activity was its fastest in 10 years.

Last week, official data showed the sector grew at 1.7% in the third quarter compared with the previous quarter.

The Bank of England last week unexpectedly curtailed its support for mortgage lending under the Funding for Lending scheme, amid evidence that mortgage availability had improved to the extent that it no longer needed support from that quarter.

Markit also said commercial construction grew sharply in November.

David Tinsley, UK economist at BNP Paribas, said the findings suggested the UK could soon recover the ground lost during the crisis: "These survey indicators are suggesting something like a 1% rise in GDP [gross domestic product] in Q4.

"If this sort of pace can be continued into 2014, then the level of UK output will have risen above its pre-crisis peak by next summer."

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