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Posted: 31.07.14

Surge in house building and commercial activity sees job creation in construction hit 17-year high

Surge in house building and commercial activity sees job creation in construction hit 17-year high

Job creation within the construction industry has formed the subject of industry discussion as the latest survey of buyers has shown that open vacancies are growing at their fastest rate since the Markit/CIPS UK Construction PMI began in 1997.

Output growth has also reached a four-month high with the index hitting 62.6 in June from a seven month low of 60 in May.
Postings above the 50.0 no-change threshold have been consistent for the past 14 months, with the latest reading signalling the most confident output growth figure since February.

Commenting on the positive industry tone is David Noble, Group Chief Executive Officer at the Chartered Institute of Purchasing & Supply:

“The construction boom ramped up to a four – month high in June, fuelling the strongest rise in job creation in the survey’s history.

“New orders accelerated sharply this month, with much of the increase driven by the expanding housing market and supported by improved commercial activity."

“Despite civil engineering taking some heat out of activity, UK construction is well positioned to deliver sustained growth in the coming months.”

David goes on to say that although a number of firms highlighted some concerns about the prospect of interest rate rises, the headline figures this month painted a positive picture.

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI, said: “UK construction companies started the summer with another surge in house building and commercial activity, which helped to offset a slight moderation in civil engineering growth as temporary projects related to flood relief came to completion.

“The latest survey suggests that the UK construction sector has expanded by more than 1% over the second quarter of 2014, driven by improvements in the underlying health of the UK economy, favourable funding conditions and robust increases in new housing starts.

“A key recent development across the construction sector has been the return to pre-recession rates of job creation, following a prolonged period of falling payroll numbers and cuts to operating capacity.

“Moreover, the latest rise in construction employment was the fastest since the survey began in 1997, which represents a remarkable yardstick of progress as the sector looks to recover the ground lost over the past seven years.”