Home building grew at its fastest pace for a decade in September in the latest sign of the housing sector forging ahead amid Government initiatives such as the Help to Buy scheme.
Figures from the closely-watched Markit/CIPS purchasing managers' index (PMI) showed residential construction activity growing at the highest rate recorded since November 2003.The wider construction industry continued to grow strongly though the reading of 58.9 - where 50 separates growth from contraction - represented a slowing in the pace of expansion compared to 59.1 seen in August.
It was dragged down by an easing of growth in civil engineering from an August high.
However, commercial construction continued to forge ahead, increasing output at its fastest since May 2012 as analysts predicted a surge in occupier demand pushing up rents.
The sector was badly hit by the economic downturn but Tim Moore, senior economist at Markit, which carried out the survey, said: "Construction is no longer the weakest link in the UK economy."
The figures showed the sector had grown for the fifth month running, adding to hopes that overall gross domestic product for the third quarter will have increased by as much as 1%.
Optimism about the outlook for the year ahead is at its strongest since April 2010, while jobs rose for the fourth month in a row, encouraged by increased volumes of new work, the report said.
Anecdotal evidence pointed to greater levels of spending among both public and private sector clients.
David Noble, chief executive of the Chartered Institute of Purchasing and Supply, said: "The construction sector is firing on all cylinders.
"Having been in the doldrums so long, builders are using this renewal as a platform to invest, with employment seeing the most dramatic upturn in close to six years."
Howard Archer, economist at IHS Global Insight, said: "House building activity is seeing particular strength which is welcome news given concerns that a shortage of properties risks contributing to a new housing market bubble."
Kelvin Davidson of Capital Economics said predictions that commercial rents would only edge up modestly over the year were looking likely to be surpassed.
He
said the data suggested property developers were increasingly confident
about the prospects for occupier demand and hence the rental values
they could expect.
House builders have been buoyed in
recent months by easing credit conditions as well as Government
initiatives such as Help to Buy.
The latest extension of
the scheme offering mortgage guarantees to help buyers get onto the
housing ladder has just been brought forward - despite fears it could
lead to an overheating in property prices.
Article Source: http://www.belfasttelegraph.co.uk/business/news/house-building-growth-continues-29629083.html
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