Activity in the British Construction sector increased at a notably faster pace in March, contrary to economists' expectations for a slowdown, data from a survey by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) showed Tuesday.
The seasonally adjusted purchasing managers' index (PMI) for the construction sector climbed to 56.7 in March from 54.3 in February. A PMI reading above 50 indicates expansion in the sector, while one below suggests decline. The index recorded growth in each month since January 2011. Economists expected the index to drop to 53.4 in March.
New orders received by UK construction firms increased at the fastest rate in four-and-half years in March, helped by a general improvement in market activity, increased tender opportunities and long-running negotiations coming to completion
Activity in the commercial construction sector grew at the strongest rate during the month. The increase in civil engineering activity was the fastest since March 2011. Meanwhile, residential construction activity increased only moderately.
Employment in the construction sector increased modestly in March, reflecting growth in both output and new orders. Input prices increased sharply during the month, driven by higher raw material costs, particularly for oil. British construction companies continued to be optimistic that activity would rise over the next year.
"The good weather appears to have led to a surge in demand for construction projects in March, adding to the recent flow of good news which suggests the economy will have skirted a recession," Markit chief economist Chris Williamson said.
by RTT Staff Writer
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