Construction recovery continues apace
The sharpest rise in construction output for just over six years is reported by the October 2013 data from Markit/CIPS UK Construction PMI, with the Purchasing Managers’ Index at 59.4 compared with 58.9 in September and above the 50 no-change threshold for the sixth consecutive month. Housing activity remained the strongest performing areas of the construction sector, according to Markit.
In addition, the Glenigan Index shows a strong rebound in private non-residential projects starting on site following the slowdown earlier in the year. For the three months from August to October, the value of office starts increased by 28% and industrial starts by 36% compared with the same period in 2012.
Retail showed the sharpest growth in the Glenigan Index at 73%, but against a low base as starts in this sector dissipated in the second half of 2012. Government-funded areas such as health and community and amenity remain weak, mired by ongoing austerity measures.
Allen Wilén, economics director with Glenigan predicts continuing optimism over construction recovery going into 2014: The upturn in project starts is forecast to continue, with increases across most sectors. There is increased confidence of a broad-based UK economic recovery, and private sector activity will remain strong.
‘Private non-residential project starts are set to improve strongly over the next six months. Supply of office space is already tight in many cities, and further economic recovery will increase demand further, while encouraging investment. Retail starts are set to continue to rise in response to increasing sales volumes and signs of consumer confidence.’
