British construction sector expands most in three years: Markit

Activity in the British construction sector increased at the fastest pace in more than three years in July, data from a survey by Markit Economics and the Chartered Institute of Purchasing and Supply showed Friday. The growth rate also far exceeded economists' expectations.

The seasonally adjusted purchasing managers' index for the construction sector climbed to 57 in July from 51 in June, hitting the highest level since June 2010. Economists were looking for a score of 51.5.

The index has now stayed above the neutral mark of 50, which indicates unchanged activity, for the third consecutive month. The upturn in overall activity was driven by the strength of residential construction, which increased at the fastest pace in three years.

Higher levels of business activity were recorded in all three broad areas of the construction sector, with residential building activity surging to its steepest since June 2010. Civil engineering activity returned to expansion in July, and commercial construction output rose at the most marked pace since May 2012.

New orders received by construction firms increased for the third successive month, and at the steepest rate since April 2012, helped by a marked improvement in demand within the house building sector.

In line with the pick up in activity, firms raised their employment levels further during the month. The rate of job creation was the strongest since December 2011.