This morning the latest Purchasing Managers’ Index (PMI) on UK construction was out, and boy was it good. It was especially good for residential construction.

The headline PMI for UK construction hit 59.1 – that is seasonally adjusted by the way. To put this in context, any score over 50 is mean to denote growth. It was the highest reading since September 2007.

Residential construction remained the strongest performing sub-sector, with output rising at the fastest pace since June 2010.

It seems the government’s Help to Buy scheme and public sector infrastructure spending have largely been behind the improvement.

David Noble, chief executive officer at the Chartered Institute of Purchasing & Supply, said: “A new dawn is breaking in construction…. Builders have seen a step change in recent months and are now starting to show their true potential to the UK economy. Nowhere is this more true than in new business, where growth is at its second-strongest in almost six years, leading to more jobs and increasing confidence.

“Robust expansion can be seen in all three sub-sectors; house building is rising at a rate not seen since mid-2010, commercial growth is also strong, but it is the strongest growth in six years recorded in civil engineering that is a real cause for optimism and a sure sign the sector has overcome its previous difficulties.

“This new direction brings new challenges, not least the prospect of additional work and insufficient capacity to meet demand. How the sector navigates these tensions and manages the supply chain could come to define its performance over the coming months.”

© Investment & Business News 2013