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The IHS Markit/CIPS UK Construction PMI touched a five-month
high of 53.1 in November from 50.8 in October and better than
all forecasts in a Reuters poll of economists that had pointed
to a reading of 51.0. The upturn was driven entirely by the
residential sector.
Commercial and civil engineering activity continued to contract,
despite a marked easing in cost pressures. British finance
minister Philip Hammond announced a series of measures on Nov.
22 to boost house-building, which has lagged demand for years
and contributed to a sharp rise in house prices. IHS Markit said
70 percent of responses to the survey were collected before the
budget speech.
Confidence about business prospects over the next year edged up
to a three-month high but remained near three-year lows. IHS
Markit/CIPS, which compiles the survey, said construction
companies linked worries to political and economic uncertainty
ahead of Britain's exit from the European Union.
"UK construction companies experienced a solid yet uneven
improvement in business conditions during November," said IHS
Markit associate director Tim Moore.
Costs faced by construction companies for materials increased at
the weakest pace since September 2016. Some firms said price
increases driven by the pound's post-Brexit-vote fall
had started to lose their bite, IHS Markit reported.
Construction comprises around 6 percent of British economic
output. A PMI for the services sector -- more than 10 times the
size of construction -- is due on Tuesday.
(Reporting by Andy Bruce; Editing by Catherine Evans; ((andy.bruce@thomsonreuters.com;
+442075423484; Reuters; Messaging: andy.bruce.thomsonreuters.
com@reuters.net)
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