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Housebuilding spurs modest rebound in UK construction
[LONDON] Housebuilding spurred a recovery in Britain's construction industry last month, making up for weakness in other parts of a largely downbeat sector, a survey showed on Monday.
The IHS Markit/CIPS UK Construction PMI touched a five-month high of 53.1 in November from 50.8 in October and better than all forecasts in a Reuters poll of economists that had pointed to a reading of 51.0.
The upturn was driven entirely by the residential sector. Commercial and civil engineering activity continued to contract, despite a marked easing in cost pressures.
British finance minister Philip Hammond announced a series of measures on Nov 22 to boost house-building, which has lagged demand for years and contributed to a sharp rise in house prices. IHS Markit said 70 per cent of responses to the survey were collected before the budget speech.
Confidence about business prospects over the next year edged up to a three-month high but remained near three-year lows.
IHS Markit/CIPS, which compiles the survey, said construction companies linked worries to political and economic uncertainty ahead of Britain's exit from the European Union.
"UK construction companies experienced a solid yet uneven improvement in business conditions during November," said IHS Markit associate director Tim Moore.
Costs faced by construction companies for materials increased at the weakest pace since September 2016. Some firms said price increases driven by the pound's post-Brexit-vote fall had started to lose their bite, IHS Markit reported.
Construction comprises around six per cent of British economic output. A PMI for the services sector - more than 10 times the size of construction - is due on Tuesday.