The British construction sector hit a record high for job creation in July, the latest Market/CIPS report has shown.

The UK Construction Purchasing Managers’ Index (PMI) report, which was released yesterday,  recorded a reading of 62.4, just above the consensus expectation of 62 and only slightly behind June’s growth of 62.6. Any score above 50 indicates growth.

This signalled the steepest rise in residential building activity since November 2003. It was attributed to favourable funding conditions and strong demand for new housing.

The rise in demand has also led to improvement in new  business intakes and purchasing activity throughout July, thereby extending the current expansion period to 14 months.

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI, said:

“July’s figures suggest the UK construction sector is enjoying its strongest cyclical upswing since the global financial crisis, while a new record rise in employment highlights that construction firms are increasingly confident about the sustainability of the upturn.

“All three core categories of construction activity saw historically steep improvements in output levels through July, unsurprisingly led by a resurgent house building sector.”

The survey adds to the view that the construction sector is performing impressively.

David Noble, Group Chief Executive Officer at the Chartered Institute of Purchasing and Supply, attributed the acceleration in the employment index to the boom in house building. However, there are concerns over the quality of sub-contractors – the industry reported the sharpest deterioration in the quality of sub-contracted work since 1999.

David Noble said:

“There’s evidence that firms are starting to look beyond in-demand sub-contractors and instead further boost their own staffing levels, which goes someway to explaining the record rise in employment rates.”

Photo by Bill Jacobus