Employment growth in UK’s construction sector hits all-time high
The UK's construction sector is speeding up again this June, with activity growing at its fastest pace in four months.
According to purchasing managers' index (PMI) data from Markit, the sector is expanding more ferociously than first estimated, with a headline reading of 62.6.
Any number above 50 implies that activity in the sector is expanding. Today's release is notably stronger than Markit's flash estimate of 60.
Analysts at Daiwa Capital Markets expected Markit to report a modest decline, with a consensus poll of economists forecasting that construction PMI would be revised down to 59.5. And promisingly, employment growth in the sector is now at its highest levels since the survey began in 1997.
Daiwa's Grant Lewis says that this morning's Nationwide house price data is "consistent with solid housing activity" as prices have risen by 11.8 per cent in the year to June, which along with these PMI numbers suggest the construction sector is still experiencing a vigorous expansion.
Tim Moore, senior economist at Markit, says that this latest data "suggests that the UK construction has expanded by more than one per cent over the second quarter of 2014".
After yesterday's thumping manufacturing print, we have to wait for tomorrow's services PMI to see if the UK can complete an economic hat-trick. HSBC analysts are pencilling in a slightly lower final services reading on the back of weaker future activity and new orders reported in Markit's initial release.
Staffers at Morgan Stanley also see a weaker final number, although note that "the survey will likely remain high by historical standards and consistent with strong growth in the key services sector."
