British construction sector expands sharply in July


Britain's construction industry expanded at its fastest pace since November 2002 thanks to healthy new business flows, a key industry survey published today showed.

The Chartered Institute of Purchasing and Supply said its purchasing managers' index for the sector rose to a seasonally-adjusted eight month high of 55.9 in July up from 53.3 in June.

The new orders index rose to 60.1 up from 58.3 in the previous month. Robust growth in the figures for the construction sector will give support to other recent data showing the UK economy recovering from the global downturn.

"The construction sector continued to experience strong growth in July, largely due to a sharp increase in new business," said Mr Roy Ayliffe, director of professional practice at CIPS.

"Purchasing managers utilised their strategic purchasing expertise by stepping up quantities of purchases to support higher levels of activity."

Input prices continued to rise, but at a slower rate than last month. Input prices grew at the slowest rate since November 2001 thanks to easing oil prices, the survey said. The Input Price Index registered 55.8 in July down from 57.1 in June.

Rising activity helped boost employment in the sector. The seasonally-adjusted Employment Index rose to 53.5 in July up from 52.7 in the previous month - the fastest rate of growth since November 2002.