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Activity in the UK’s construction sector was stronger than expected in April, according to a new business survey, the second encouraging piece of UK economic data released this week.

The construction purchasing managers’ index rose from 52.2 to 53.1, its strongest level of the year so far. Economists surveyed by Reutershad predicted a slip to 52. A reading above 50 indicates expansion over the month.

IHS Markit, which compiles the survey alongside the Chartered Institute of Procurement & Supply, said companies reported a “solid start” to the second quarter with civil engineering the most buoyant sub-sector. Growth in residential building also accelerated, but commercial building work only grew slightly.

However input cost pressures continued to increase despite a slight moderation in the inflation rate.

The positive result follows unexpectedly strong results from IHS Markit’s survey of manufacturing firms, released yesterday. The manufacturing PMI hit a three-year high, again confounding expectations of a slide. However the manufacturing and construction sectors together account for less than a quarter of the UK economy; the survey of the more important services sector will be released later this week.

Tim Moore, IHS Markit senior economist, said:

UK construction companies noted that the resilient economic backdrop helped to drive up client spending in April. Greater workloads led to the fastest pace of job creation since May 2016 and a continued squeeze on sub-contractor availability.

Copyright The Financial Times Limited 2017. All rights reserved.
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