UK Construction Growth Picks Up Speed

Growth in Britain’s construction sector hit its fastest pace in six months in September, boosted by stronger house building and higher levels of hiring, a survey showed on Friday.

The CIPS/Markit construction Purchasing Managers’ Index (PMI) rose to 59.9 in September, its strongest level since February, up from 57.3 in August.

That was well above the median forecast of 57.5 in a Reuters poll but below levels of more than 60 reached regularly in 2014.

A reading of British manufacturing on Thursday showed weaker growth and added to signs the overall economy slowed in the third quarter, something the Bank of England is watching closely as it considers when to start raising interest rates.

Analysts are waiting for the CIPS/Markit survey on the dominant services sector, which is due on Monday, to get a better understanding of how much Britain’s economy has cooled in the July-September period.

Staffing levels in construction rose strongly in September although new business growth eased further from a peak touched in June and was its second slowest since mid-2013, Markit said.

Expansion of residential building was the strongest for 12 months as some projects that were delayed earlier this year were launched. Commercial development also picked up speed as companies invested more in their operations.


Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell