The Markit/CIPS Purchasing Managers’ Index® (PMI®) for the construction sector showed a sharp increase in both new orders and employment.

Registering at 62.6 in November, up sharply from last month's 59.4, residential construction growth was the strongest for ten years.

Commenting on the report, David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: "House building lived up to its new-found status as star performer in November with the steepest growth rates in 10 years, with commercial and civil engineering activity holding their ground too. Inevitably, business confidence continued to rise sharply, helping to boost spending across the industry heading into the festive season.

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"Supported by favourable market conditions, new orders increased at the joint-fastest pace since September 2007. This in turn contributed to a significant increase in workforce numbers, pointing to continued optimism and rising expectations for the future.

"As seen in previous months, suppliers are struggling to keep up with the sharp surge in demand; stocks are being squeezed and delivery times continue to lengthen, to the greatest degree since 1997. Along with increasing cost burdens, there are worries that this will have an impact on output; despite this construction firms are confident this won’t hold them back in the New Year."

(CD/IT)