Construction projects still growing in UK

Julian Harris
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BRITISH construction unexpectedly increased in November, it was revealed yesterday.

In a boost for the economic recovery, construction increased to 51.8 in the Purchasing Managers Index (PMI), a measure of business activity.

The index was up slightly, from 51.6 in October. All figures over 50 indicate growth in the sector.

The rate of growth had fallen in recent months, after the boom witnessed in the second and third quarters of the year. Between April and October, the index fell by 6.6 points.

The surge in construction from April to June -- attributed to a sudden uptake of projects delayed by the recession and the harsh winter conditions – added 0.6 per cent growth to British GDP, according to Howard Archer of IHS Global Insight.

Yet the economy can no longer rely on construction to significantly aid its recovery. The industry totals just 6.3 per cent of GDP, said Archer.

Construction growth nonetheless remains steady, driven largely by commercial activity. “Private commercial development is the most resilient sub-sector at the present time,” said Simon Rubinsohn of the Royal Institution of Chartered Surveyors.

Yet house building fell for the third consecutive month.

“The weaker housing market makes builders nervous about committing to large new building projects,” said David Noble of the Chartered Institute of Purchasing and Supply, who compiled the data.