UK construction rebound lifts economic growth hopes

 
Chris Papadopoullos
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Commercial construction helped drive the overall improvement (Source: Getty)

The UK's construction sector gained some momentum in December, survey figures released this morning show.

Markit's construction purchasing managers' index (PMI) rose to a score of 57.9 in December, up from November's seven-month low of 55.3. Scores above 50 imply the sector grew over the month, with higher scores implying faster growth.

Higher levels of construction output have been recorded by the survey since May 2013, but the overall rate of expansion remained slightly weaker than seen on average over this period, Markit said.

"Commercial building was the main engine of growth, with this area of activity expanding at the strongest pace since autumn 2014," economist Tim Moore from Markit.

"There was also a rebound in house building activity in December, but momentum was still much softer than the post-crisis highs achieved during 2014."

Survey respondents said demand for commercial construction was being boosted by improving economic conditions in the UK. House building activity rebounded from November's 29-month low.

The rise in the PMI suggests the construction sector, which makes up six per cent of the economy, contributed positively to the UK's economic growth in the final three months of 2015.

"This is a largely decent, reassuring survey that boosts hopes that construction output contributed to GDP growth in the fourth quarter of 2015 after being a drag in the third quarter (when it contracted 1.9 per cent quarter-on-quarter)," said Howard Archer, chief economist at IHS.

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