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UK construction sector rising 'like phoenix from the ashes'

Markit/CIPS construction PMI for the UK rose to 59.4 in October
Markit/CIPS construction PMI for the UK rose to 59.4 in October

Activity in the British construction industry picked up speed last month, a survey of purchasing managers showed today.

The Markit/CIPS construction PMI rose to 59.4 in October ,beating economists' expectation that it would hold steady at September's reading of 58.9.

The rate of growth was the fastest since September 2007.
              
The figures were the latest in a series of positive economic figures and followed a strong reading for the manufacturing sector on Friday.
              
Economists will now turn their attention to tomorrow's services PMI, which covers private-sector firms outside the retail sector and casts light on a much larger part of the British economy than construction.

"UK construction output continues to rise like a phoenix from the ashes, with housing, commercial and civil engineering activity all seeing strong rates of expansion at the start of the fourth quarter," Markit's economist Tim Moore said.
              
Construction was one of the hardest-hit sectors of the British economy in the aftermath of the financial crisis, as housing market activity slumped and the government and businesses axed building projects to save money.
              
But it has picked up this year, and in the three months to September it expanded by 2.5% according to official data, the fastest rate since the second quarter of 2010. It is nonetheless a relatively small part of the UK economy.

House building was the strongest sector of construction for another month - something likely to please the government, which expanded a scheme to help home-buyers at the start of October which also aims to bolster the supply of new homes.

British property prices have been soaring, something that has triggered concern among some analysts about sustainability.