By Ian McConnell

UK construction output and employment in the sector grew in May at their fastest monthly rates since 2014, with housebuilding activity particularly strong, a key survey shows.

The Chartered Institute of Procurement and Supply and IHS Markit said yesterday that their total activity index for UK construction climbed from 61.6 in April to 64.2 in May on a seasonally adjusted basis. This took it even further above the 50 no-change mark to signal the fastest growth since September 2014.

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Housebuilding, for which the activity index was at 66.3 last month, was the strongest-performing of the three construction sub-sectors surveyed. Second-strongest was commercial property construction, which recorded its sharpest rise in activity since August 2007.

And civil engineering activity also grew strongly in May, although its pace of increase eased slightly from April.

New orders for UK construction companies grew in May at the fastest pace since the survey began in April 1997.

The rate of job-creation in the sector last month was the fastest since July 2014. And subcontractor usage increased at a survey-record pace.

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Around 61% of UK construction companies surveyed predict a rise in activity over the coming 12 months, while nearly 8% anticipate a decline.

However, the survey shows that stretched supply chains and steep rises in raw material prices contributed to a rapid increase in average cost burdens.

Tim Moore, economics director at IHS Markit, said: “Total new orders increased at the strongest rate since the survey began more than two decades ago, but supply chains once again struggled to keep pace with the rebound in demand.

“There were widespread reports citing shortages of construction materials and wait-times from suppliers lengthened considerably in comparison to those seen during April. Imbalanced supply and demand led to survey-record increases in both purchasing prices and rates charged by sub-contractors.”