British construction sector benefits from surge in housebuilding

LONDON, Dec. 4 (Xinhua) -- The British construction sector, which has contracted for much of this year, enjoyed its second successive month of growth in November, driven by housebuilding.

The construction sector grew in November, according to the purchasing managers' index (PMI) figures from Markit/CIPS released on Monday, with index activity rising from 50.8 in October to 53.1 in November (above 50 is growth), beating consensus expectations of subdued growth at 51.0.

The decline in the sector which has characterized 2017 looks as though it may have passed.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, a financial data analysis firm in London, told Xinhua: "The average level of the PMI in Q4 so far is consistent with output holding steady, following quarter-on-quarter declines of 0.6 percent in Q2 and 0.9 percent in Q3.

"Both the new orders and future activity indices suggest that output with continue to flatline in the near term."

The latest reading was the highest for five months and signalled a solid rate of business activity growth across the sector.

Housebuilding was again the primary growth engine for construction activity. Survey respondents suggested that resilient demand and a supportive policy backdrop had driven the robust and accelerated upturn in residential work.

Commercial construction was the weakest performing area of activity in November, which continued the trend seen this year. Some firms noted that Brexit-related uncertainty and the subdued economic outlook had held back spending.

Civil engineering activity fell for the third successive month, the longest phase of decline seen for over four years, but the latest fall was small.

Some survey respondents commented on hopes that forthcoming tender opportunities on infrastructure programmes, especially energy and transport, would help boost business.

Prospects for the sector were reasonable, and Tombs said: "Looking ahead, continued support from relatively low mortgage rates, the Help to Buy Scheme and other housing policy initiatives should ensure that housing maintains momentum."

The possibility of more clarity in the Brexit process, with some progress in divorce talks between Britain and the European Union (EU) being made on Monday, would be a benefit for businesses, allowing businesses to consider investments currently put on hold.

Tombs said: "Signs that the Brexit divorce terms will be agreed imminently, enabling future relationship talks to begin, might help corporate confidence to recover." Enditem