UK construction growth unexpectedly surges in Feb: PMI

[LONDON] Growth in Britain's construction industry jumped unexpectedly to a four-month high last month, adding to evidence Britain's economy started 2015 strongly, although building firms hired staff at the slowest pace in more than a year.

The Markit/CIPS UK construction purchasing managers' index (PMI) rose a full point to 60.1, defying expectations for a slight fall to 59.0 and reaching its highest level since October.

Growth picked up across the housing, commercial and civil engineering sectors.

A similar survey on Monday showed the pace of expansion in British manufacturing hit a seven-month high in February.

Taken together, the PMI surveys will cheer finance minister George Osborne, who hopes strong economic growth over the last 18 months will persuade voters to hand his Conservative Party victory in a national election on May 7.

Survey compiler Markit reported some companies sought to delay spending decisions ahead of the election, which is shaping up to be one of the most uncertain in modern British history.

Still, confidence among construction firms about the year ahead strengthened.

"The latest survey highlights renewed vitality within the UK construction sector, as output growth picked up further from the soft patch seen at the end of 2014," said Tim Moore, senior economist at Markit.

"However, some construction companies noted that the uncertain general election outcome could prove a temporary bump in the road for new work."

The survey showed employment growth in construction, which accounts for just over 6 per cent of Britain's economy, fell to its lowest level since December 2013.

A fall in output in construction was a drag on Britain's gross domestic product growth in the fourth quarter of 2014, but economists said they expected the weakness in the industry would prove short-lived.

REUTERS