Construction springs back in quarter one

Julian Harris
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BRITISH construction grew strongly through the first quarter of the year, data revealed yesterday.

However, the sector, which accounts for around 6.3 per cent of GDP, is increasingly under pressure from rising prices.

Input prices for construction accelerated to a 31-month high, according to the closely-watched purchasing managers’ index (PMI) published yesterday by Markit.

Costs measured 75.8 in the PMI last month, up from 73.4 in February and 67.6 in January, as commodity prices continue to soar.

Nonetheless, construction activity grew at an index score of 56.5 for March – just narrowly lower than February’s eight-month high of 56.6. Readings above 50 indicate growth.

After a snow-hit December, in which the industry was knocked backwards – recording 49.1 –, it bounced back in January to 53.7 and has continued expanding since.

“The March PMI for the construction sector suggests that fears about the impact on activity of forthcoming public spending cuts may be exaggerated,” commented economist Simon Rubinsohn of the Royal Institution of Chartered Surveyors.

The rise in activity was broad based, with growth in housing measuring 57.1 on the index, commercial activity at 53.1 and civil engineering at 58.5.

Employment in the industry has dropped for nine straight months, yet is creeping towards levelling out, at 49.9 for March – up from 48.9 in February.