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CIPS data shows housing activity driving construction growth for second month running

Construction activity rose moderately for the second consecutive month, according to the latest Purchasing Managers’ Index from Markit/Chartered Institute of Purchasing & Supply.

UK construction posted 51.0 in June 2013, higher than the 50.0 that denotes no change from the previous month.

The figure is the strongest since May 2012 and indicates growth for two consecutive months.

CIPS/Markit said that higher output was driven by solid growth in new orders in June, which in turn meant employment levels rose over the month.

But growth was also driven by a solid rate of activity in the housing sector, which grew for the fifth consecutive month, but at a slower rate than May 2013.

Meanwhile, activity in the commercial and civil engineering sectors was said to have stabilised, ending months of decline for both sectors.

Input buying from construction companies grew in June 2013 on the back of the growth in activity, but supplier performance deteriorated.

CIPS CEO David Noble said: “A new dawn is emerging in the construction industry, with confidence of a sustained recovery beginning to build thanks to two months of consecutive output growth and the pace of new orders expansion hitting a 13-month high.

“Housing is the leading light sustaining last month’s performance. Meanwhile commercial and civil engineering activity stabilised, arresting months of decline giving further cause for optimism.”

Mr Noble said the strongest growth in new business orders for over a year was driving employment upwards, resulting in confidence hitting its highest level since April 2012.

“This enthusiasm may also have been bolstered by the government’s support for new housebuilding. Whether expectations match reality, only time will tell,” he added.

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