UK construction PMI improves in Dec, beats expectations

The construction sector activity in the UK economy increased its pace of expansion and in the month of December, with input costs hitting the highest levels since April 2011, a fresh report from Markit Economics showed on Wednesday.

The final Purchasing Managers' Index (PMI) in the UK jumped to 54.2 points in Dec, after having booked 52.8 points in Nov. Markets had predicted no growth  last month.

Key Points:

Robust and accelerated upturn in new work

Construction output increases at fastest pace since March

Input cost inflation at highest level since April 2011

Tim Moore, Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI®, noted, “December’s survey data confirmed a solid rebound in UK construction output during the final quarter of 2016. All three main areas of construction activity have started to recover from last summer’s soft patch, but in each case growth remains much weaker than the cyclical peaks seen in 2014.”

“House building remains a key engine of growth for the construction sector, with the latest upturn the fastest for almost one year. Meanwhile, commercial activity was the weakest performing category in December, reflecting an ongoing drag from subdued investment spending and heightened economic uncertainty.”