New figures have revealed the UK's construction new order growth reached an 11-month high in December.

The latest Markit/CIPS UK Construction PMI posted at 54.2 in December, up from 52.8 in November.

With the latest figures suggesting all main construction activity ares are on the road to recovery, new business volumes were at their fastest pace since March 2016. In addition, new order volumes rose their fastest since January 2016.

Residential building activity remained the best performing sub-category at the end of 2016, with housing activity expansion also at its fastest since January 2016. Civil engineering workloads also increased in December, while commercial construction marginally increased.


While staff recruitment across the sector also continues to grow, the latest increase in average cost burdens was the fastest since April 2011. At the same time, supplier lead- times continued to lengthen, with the latest survey pointing to the most marked deterioration in vendor performance since June 2015.

Overall, anecdotal evidence suggested that improving order books and a general rebound in business conditions had helped to lift construction output in December.

Tim Moore, Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI, said all three main areas of construction activity have started to recover from last summers "soft patch", yet growth remains much weaker than peaks seen in 2014.

"The main negative development in December was a sustained acceleration in input cost inflation to its strongest since 2011," he said.

"UK construction companies noted that the weaker sterling exchange rate had resulted in higher costs for a wide range of imported materials, while some also reported that forward purchasing of inputs had led to depleted stocks among suppliers."

(LM)