Growth in the UK construction industry picked up in December from a seven-month low in November, helped by a rise in commercial building on the back of the country's economic recovery.
The Markit/CIPS UK Construction Purchasing Managers' Index rose to 57.8 from 55.3, above the median forecast of 56.0 in a Reuters poll of economists.
The survey added to some other signs that overall economic growth might gain a bit of speed in the fourth quarter after slowing in the previous three-month period.
As well as the increase in commercial construction, house-building gathered speed in December after output fell to its lowest level since mid-2013 in November, the survey showed. Civil engineering shrank, albeit marginally, for the first time since April.
Tim Moore, a senior economist at Markit, said the survey showed companies in sector were optimistic about 2016. "There were also reports that sustained improvements in UK economic conditions had led to upbeat expectations for clients' budget setting for the year ahead," he said.
Richard Threlfall, KPMG’s UK Head, Infrastructure, Building and Construction is confident that civil engineering activity will pick up quickly again given the huge pipeline of infrastructure work committed by the Government.
“The industry can expect higher spending by the Government as it rushes to shore up flood defences and the repair damage left by the storms," he added.
“Although cost inflation in the sector moderated in December, the rate of employment increased and we can expect to see further pricing pressure in the first quarter of 2016 as construction demand picks up further.
"However through the course of 2016 I believe recruitment into the industry will reduce the skills gap and supply and demand in the industry will start to stabilise, bringing more predictable order books and the potential for better margins for Tier 1s.”
