Bustling construction “building optimism in the economy”

Activity in the construction sector appears to have risen at the fastest pace so far in 2017, boosted by a sharp increase in civil engineering and housebuilding.

The Times reports that economists say that a “hardy UK economy and strong client confidence” had contributed to the sharpest uplift in new orders in the sector since the beginning of the year, as well as the fastest rise in new jobs since May 2016.

The purchasing managers’ index for construction, which is considered one of the best indicators of growth in the sector, rose to 53.1 in April, up from 52.2 in March. Any reading above 50 indicates growth in activity, while below 50 signals contraction.

Tim Moore, senior economist at IHS Markit, which compiles the survey, told the newspaper, “April’s survey reveals a positive start to the second quarter of 2017, with a robust upturn in civil engineering activity helping to boost the construction industry.”

The report says evidence of an improving outlook for construction in the PMI numbers were backed up by a quarterly construction market survey by the Royal Institution of Chartered Surveyors. Builders expect their workloads to improve at the fastest pace since the EU referendum, driven by civil engineering projects on road and rail driven by the government’s infrastructure programme.

The Times does issue a warning, though, quoting Jeff Matsu, senior economist at the RICS, as saying, “The mood music in the construction sector has improved. However, the survey does highlight some key challenges that need to be addressed if government’s ambitious plans for housing and infrastructure, in particular, are to be met.

“Access to finance, alongside planning and skill shortages, remain big obstacles to delivery.”

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