Construction growth fastest for two years

UK construction activity expanded in October at its fastest pace in more than two years, helped by a surge in new orders, a survey claimed.

The Chartered Institute for Purchasing and Supply (CIPS) said its seasonally adjusted index for construction rose to 58.1 - its highest reading since March 2004 - from 53.6 in September. Growth in new orders climbed to 57.3 from 54.1 in September, its strongest reading since November 2005.

"Not only was growth at its sharpest since March 2004, but expansion was widespread throughout the sector," Roy Ayliffe, director of professional practice at CIPS, said.

"The extent of growth in the construction sector was, however, tempered by signs of capacity constraints," he added. And companies were slightly less optimistic about future prospects, with the expectations index easing to 73.2 from 75.7.

Housebuilding activity rose to 53.5 from 50.1 in September, according to the survey. Commercial construction activity picked up to 62.5 from a reading of 54.8, while civil engineering activity expanded on the month, picking up to 51.1 from 47.0. Firms' input costs eased in October to 67.0 from 68.5 in September.