Construction output growth increased to a seven-month high in September, according to the latest Markit/CIPS UK Construction PMI report.

Across the sector, the index rose to 59.9 in September, up from 57.3 in August.

Improved growth was experienced across all sectors, with construction companies remaining highly upbeat about their prospects over the next 12 months.

Over half the survey panel (52%) forecast an upturn in business, while 6% anticipate a reduction.

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David Noble, Group CEO at the Chartered Institute of Procurement & Supply, said: "The building blocks were firmly in place this month as the sector reported more work, rising staff levels, and strong optimism for the future.

"Though the overall growth rate of new business was showing signs of slowing down, all three sectors offered positive news with residential housing the strongest performer.

"Issues around skills shortages continued to be a drag on the sector with the resultant demand for higher salaries from the smaller pool of skilled staff. Companies reported higher staffing levels but it was a continuing challenge to find specialist skills as they struggled to rely less on sub-contractors to fill the gaps.

"Lower fuel and raw material costs helped margins even in a landscape of strong competition. Levels of output were robust and increased at the fastest pace for over six months."

(LM/CD)