02 August 2006 | Paul Snell

Growth in the UK construction industry rose to its highest level since April, according to the latest CIPS construction purchasing managers' index (PMI) released today.

The PMI, where a rate above 50 shows growth, recorded total construction activity at 53.2 in July. This compares with 50.8 in June, which was the weakest for five months. Strengthened activity was attributed to a rise in new business.

Building work on housing showed a significant rise following two months of decline. The July figure for the housing activity index was 53.4, compared with June's recording of 44.6. Growth in commercial activity also remained solid, at 53.2, slightly down on June's 53.3. Civil engineering growth also rose to 50.8, the first time it has registered above 50 since September 2005.

The use of subcontractors fell for the fourth successive month as more companies chose to deal directly with work themselves, with July's subcontracting index reading 49.4.

The quantity of materials purchased rose from 50.4 in June to 53.4 in July. The rate of growth, attributed to increased workloads, was the sharpest rise since March.

Coverage of previous PMI reports is available at www.supplymanagement.com/pmi

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