Construction grows at fastest rate for a year

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The Independent Online
Britain's construction sector continued to buck the depressing trend found in manufacturing and services by growing strongly in July, says the monthly Purchasing Managers' Index (PMI).

Britain's construction sector continued to buck the depressing trend found in manufacturing and services by growing strongly in July, says the monthly Purchasing Managers' Index (PMI).

Construction grew by its fastest rate of expansion in the past year, registering 59.9 on the PMI. The index works on the basis that anything above 50 indicates growth, and the higher the number, the faster the growth.

Construction has registered growth of above 50 for the past 30 months. In contrast, manufacturing has been rated at lower than 50 for the last five months.

While construction has escaped a similar fall so far, this could change over the next few months as companies in difficulty now stop commissioning construction work.

Luke Thompson, senior economist at NTC, a research company which collected the data, said: "The level of new contracts has been strong so far. But there is anecdotal evidence that there could be a slow down in the second half of the year."

All three areas of construction covered by the survey – housing, civil engineering and commercial activity – recorded robust increases in July. In line with evidence of strong increases in house prices, construction of domestic properties showed the strongest growth, with a rate of 60.7. However, this was the slowest rate for five months.

The PMI index on construction is compiled by the Chartered Institute of Purchasing and Supply and BuildOnline, an internet business solutions company. The CIPS also measures manufacturing and services.

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