(Corrects to show PMI readings measure month-on-month, not
LONDON, Sept 2 Construction output in Britain
grew at its fastest pace in seven months in August, boosting job
creation but also putting strain on suppliers, industry data
showed on Tuesday.
The monthly Markit/CIPS purchasing managers' index (PMI) for
construction climbed to 64.0 in August from 62.4 in July,
exceeding all the forecasts in a Reuters poll of economists.
Output grew in each of the housing, commercial and civil
engineering markets, Markit said.
Readings above 50 indicate month-on-month growth in
activity. Those below 50 represent contraction.
British construction companies took a beating from the
financial crisis and only began to grow strongly last year,
helped by the economic recovery, low interest rates and
programmes designed to boost demand for homes.
But construction of new homes remains below levels needed to
meet demand and the Bank of England has said that risks from the
housing market pose the biggest domestic threat to the country's
Employment growth in construction remained strong, falling
only slightly from a record high reported in July.
"A broad-based upturn in construction demand has created a
boom in job creation this summer, as construction companies look
to replace capacity lost in the aftermath of the recession,"
said survey author Tim Moore.
Respondents cited Britain's strong economic recovery as one
reason new work continued to come in. More than half of
companies said they expected a rise in business activity over
the forthcoming year.
The steep increase in employment has left the supply chain
feeling the strain. Sub-contractor availability dropped at
record pace and their charging rates grew at the fastest pace to
Supplier performance also suffered, leading to the slowest
delivery times from vendors since the survey began in 1997.
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(Writing by William Schomberg Editing by Jeremy Gaunt)