Builders' boost for UK economy

Britain's builders grew at their fastest pace for eight months in February as the industry's fight back from winter snow gathered momentum, an industry survey showed today.

The latest Chartered Institute of Purchasing and Supply/Markit activity survey, where a score over 50 signals growth, saw a surprise rise to 56.5 from 53.7, the best since last June.

The healthy survey, coupled with manufacturers maintaining record growth over the month, could add weight to the case of Bank of England hawks pressing Governor Mervyn King for rate rises at next week's monetary policy committee meeting, despite the UK economy's latest shock 0.6% decline.

CIPS' services survey - by far the biggest sector of the economy - is due tomorrow.

Official figures revealed a 2.5% slide for construction in the last quarter, but CIPS said all three areas of the industry - civil engineering, housebuilding and commercial building - grew last month. Civil engineering expanded at its fastest pace for three years with rising tender opportunities and orders.

Chief executive David Noble said the industry was showing "signs of repair" but added that the recovery was "at least in part built on shifting sands".

Confidence is low, industry lay-offs continue and firms are under pressure as input prices rise at their fastest pace since August 2008.

Noble added: "The situation is still fragile considering the likely impact of Government cuts."
HSBC economist Andrew Grantham also warned the actual strength of the industry could take more time to emerge.

He said: "Construction could be one of those areas where a rebound from a snow-affected month could take longer to come through."