A jump in housebuilding caused activity in the UK's construction sector to smash economists' forecasts in May, a closely-watched index has shown.
Markit's purchasing managers' index (PMI) for the construction sector in May jumped to 56, it said this morning, up from 53.1 in April and against expectations of 52.7. Any figure above 50 denotes growth in the sector.
The figure is the highest since December 2015, and together with yesterday's encouraging manufacturing PMI, suggests the UK's economy is likely to experience something of a renaissance in the coming months.
Markit said the figure was helped by the fastest increase in residential work since December 2015, which has bounced back after a seven-month low in March.
"A sustained rebound in residential building provides an encouraging sign that the recent a soft patch for property values has not deterred new housing supply," said Tim Moore, senior economist at IHS Markit.
"Instead, strong labour market conditions, resilient demand and ultra-low mortgage rates appear to have helped boost work on residential development projects in May."
“While media focus is on the imminent general election, the sector is getting on with the job at hand, as this positive reading suggests," added Mike Chappell, global corporate managing director for construction at Lloyds Bank's commercial arm.
“The major parties’ manifestos have some welcome commitments, like infrastructure projects, which would boost the sector. The hope is that after the result, plans will start moving quickly to make these projects a reality."