Yahoo Finance Housebuilding leads construction 'rebound'
Figures for the construction sector have provided hope of a recovery - after a slump in activity following the UK's vote to leave the EU.
The closely-watched Markit (NasdaqGS: MRKT - news) /CIPS purchasing managers' index (PMI) for September reported its first growth for four months - driven by housebuilding.
It said the reading was well above July's seven-year low and indicated the fastest rise in construction output since March.
The report cited the strongest rise in residential housing activity since January with firms reporting resilient demand
and generally improving market conditions.
There had been fears of a collapse in house prices in the wake of the referendum result though the most recent market surveys have pointed to a cooling in price growth.
That has partly been attributed to support for lending activity and lower interest rates introduced by the Bank of England in August.
Tim Moore, senior economist at IHS Markit (Stuttgart: A1139A - news) and author of the index, said: "UK construction companies moved back into expansion mode during September, led by a swift recovery in residential building from the three-and-a-half
year low recorded in June.
"Resilient housing market conditions and a renewed upturn in civil engineering activity helped to drive an overall improvement in construction output volumes for the first time since the EU referendum.
"A number of survey respondents noted that Brexit-related anxiety has receded among clients, although it remained a factor behind the ongoing decline in commercial building work."
The data is the latest brighter indicator for the UK economy following July's slump.
The PMI (Other OTC: PMIR - news) survey for the manufacturing sector suggested output was at its highest level for more than two years in
September - potentially a result of the weaker pound.
Construction had proved a lag on UK GDP growth - with output disappointing this year despite pressure to build more homes to help overcome the country's housing shortage.
Communities Secretary Sajid Javid has made the issue his "top priority" - with the Government announcing a £5bn plan to boost building .
A separate study released on Tuesday called on ministers to reverse policies which have dampened the buy-to-let sector.
The RICS report argued that new homes for rent were more important because too many people had been priced out of the market.
