-Tim Moore, Markit senior economist
In January, the UK construction PMI rose, following a dramatic decline to the lowest level in 17 months in the previous month. The PMI expanded at a faster rate than expected amid higher confidence and improved order books. The construction PMI edged up to 59.1, beating expectations for a fall to 56.9, from 57.6 in December 2014. However, the latest PMI reading was the second-lowest since September 2013. All construction sub-sectors strengthened last month, but with increase rate being slower than the highs in each of the sectors in 2014. The residential buildings sector had the best performance, expanding continuously for two years in a row, whereas the civil engineering activity rebounded after plunging in December and commercial construction rose in January 2015. For the first time in three months optimism over the upcoming year increased. New work volumes increased as well, which was the fastest upturn for the last three months, while the job creations slid to the weakest level since the end of 2013. Employment in construction sector was suggested to be weak due to lower volumes of new work in the preceding months.
However, construction sector, which accounts for about 6% of UK economy, was hit hard by recession and global financial crisis, still has output close to 8% below its level in 2008.
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