THE UK’s construction industry rebounded in January following a recent lull in activity, new survey data shows.
It may provide a significant boost to GDP in 2015 after a poor construction output reading slowed growth in the final three months of 2014.
The purchasing managers’ index (PMI) – a survey of private sector firms compiled by Markit – rose to a score of 59.1 for January, up from 57.6 in December, according to figures released yesterday.
A score above 50 signifies growth.
One of the strongest contributors to the recovery in the construction PMI was house building, Markit said. The research firm added that commercial property construction activity was robust.
“After the disappointing end to last year and the drop in the industry’s fortunes, the construction sector has had a perky start with good activity across all sectors,” said David Noble, chief executive at the Chartered Institute of Procurement and Supply.
The UK’s economic growth slowed to a three-month on three-month rate of 0.5 per cent in the final three months of 2014, held back largely by a 1.8 per cent decline in construction sector output.
“The data suggest that there may be some rebound in construction activity between January and March 2015, which would support GDP growth,” said Colin Bermingham, an economist at investment bank BNP Paribas.
A PMI for the UK’s manufacturing sector also ticked up on Monday, to 53 in January from December’s 52.7.
However, the UK’s biggest sector is services, which comprises about 79 per cent of the UK’s total output.
The PMI for the service sector is released today. Bermingham expects its PMI score to rebound to a score of 57 from December’s three point drop to 55.8.