GROWTH in UK construction output accelerated in January, as housebuilding activity rose at its fastest monthly pace for 10 years on the back of the Coalition Government's drive to boost the residential property market, a survey has revealed.
The survey, published yesterday by the Chartered Institute of Purchasing and Supply, also shows strong growth in UK commercial property construction and civil engineering activity.
CIPS's activity index for the UK construction sector rose from 62.1 in December to 64.6 in January on a seasonally-adjusted basis, moving further above the level of 50 which separates expansion from contraction to signal an acceleration of growth. The January reading signals the fastest monthly growth in UK construction activity since August 2007.
The pace of growth of UK construction output had eased slightly in December, on a seasonally-adjusted basis, according to CIPS's monthly survey.
CIPS's housing activity index climbed from 63.7 in December to 67.3 in January. This reading signals the fastest monthly growth of housebuilding activity since November 2003.
Survey respondents widely attributed the increase in housing activity to greater confidence in the UK property market, CIPS said.
The latest survey shows that the UK construction sector added significantly to employment levels in January, as growth in new orders accelerated to its fastest monthly pace since August 2007.
The strength of CIPS's construction survey has in recent times contrasted with a more downbeat assessment of the sector's performance in official gross domestic product data. In GDP figures published last month, the Office for National Statistics estimated that UK construction output had fallen by 0.3% quarter-on-quarter in the final three months of last year.
Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "An extremely strong across-the-board purchasing managers' survey for January provides highly compelling evidence that the construction sector's upturn remains intact at the start of 2014. This is despite the latest national accounts data estimating that construction output dipped 0.3% quarter-on-quarter in the fourth quarter of 2013.
"In fact, the survey indicates that the construction sector's recovery is gaining momentum."
He added: "Interestingly, there is no evidence in the survey that January's very wet weather and flooding had any significant dampening impact on construction activity."