‘New dawn’ in the construction sector as activity grew fastest for six years

Figures from the closely-watched Markit/CIPS purchasing managers’ index (PMI) showed a reading of 59.1 in August up from 57 in July, signalling the best rise in output since September 2007.

It is the fourth month in a row of expansion in the construction sector, according to the survey, where a reading of 50 separates growth from contraction.

The figures add to mounting optimism over the recovery as all sectors of the economy are showing a marked improvement, with experts yesterday claiming factories were “booming again” after the strongest growth in output for nearly two decades.

David Noble, chief executive at the Chartered Institute of Purchasing & Supply (CIPS), said: “A new dawn is breaking in construction. The industry recorded the fastest pace of growth since 2007 in August, leaving the dark days of recession behind.”

Tim Moore, senior economist at Markit and author of the PMI report, added: “The latest construction PMI figures are yet another indication that the UK economy has performed impressively over the summer months.”

Housebuilding remained the strongest sector once again, rising at a rate not seen since mid-2010, spurred on as the Government’s Help to Buy scheme and cheaper mortgage finance sent buyers flocking to new developments. There is speculation that the property market is on the brink of another boom, with Nationwide figures showing house prices rose 3.5 per cent year-on-year in August, while mortgage approvals jumped to their highest level for more than five years in July.

But the construction data also suggested public sector demand was picking up as civil engineering saw its strongest growth since September 2007.

Another strong PMI reading from the powerhouse services sector is expected today.