UK construction sector grows at fastest pace in two-and-a-half years

The UK construction sector grew in September at its fastest pace in two-and-a-half years, according to a survey released on Friday.

The headline S&P Global construction purchasing managers’ index rose to 57.2 in September from 53.6 in August. It remained above the 50.0 mark that separates contraction from expansion for the seventh month in a row and signalled the steepest rate of growth for 29 months.

Tim Moore, economics director at S&P Global Market Intelligence, said: "UK construction companies indicated a decisive improvement in output growth momentum during September, driven by faster upturns across all three major categories of activity.

"A combination of lower interest rates, domestic economic stability and strong pipelines of infrastructure work have helped to boost order books in recent months.

"New project starts contributed to a moderate expansion of employment numbers and a faster rise in purchasing activity across the construction sector in September. However, greater demand for raw materials and the pass-through of higher wages by suppliers led to the steepest increase in input costs for 16 months.

"Business optimism edged down to the lowest since April, but remained much higher than the low point seen last October. Survey respondents cited rising sales enquires since the general election, as well as lower borrowing costs and the potential for stronger house building demand as factors supporting business activity expectations in September."