Key Statistics: 8 July 2014

Construction

• The Glenigan Index covering the three months to June was 11% higher than a year ago, easing from 20% growth recorded in May but remaining above levels seen in the first quarter of 2014. Residential starts increased by 10%, their fastest rate since January.  Non-residential and civil engineering starts both saw growth moderate from May, to 10% and 17% respectively. The Index measures the value of all UK construction projects starting on site worth between £250,000 and £100m.

• June’s Markit/CIPS Construction PMI rebounded to a four month high of 62.6, having fallen to a seven-month low of 60.0 in May. The survey points to increasing pressure on capacity in the industry. The rate of job creation hit a record in the survey’s 17 year history, prices charged by sub-contractors increased at a pace just below last month’s survey record, and input cost inflation rose at its fastest rate for six months. The residential and commercial sectors both saw their strongest expansion since January. Civil engineering work saw continued growth, but at the slowest rate since September 2013.

Economy

• The latest round of Markit/CIPS PMI surveys suggests that the economy is creating jobs at a rapid pace. The Services and Construction sectors both recorded survey record highs in the pace of job creation, and the Manufacturing survey found job creation at its fastest pace for over three years. Despite these high levels of recruitment, the Services PMI also found that firms are facing staff shortages and this is contributing to rising wages. 

• June’s Nationwide House Price Index showed prices continuing to accelerate; a rise of 1% on May took UK average prices 11.8% higher than a year ago. Prices in London are becoming ever more detached from the rest of the UK and from growth in earnings; estimated to have risen by almost 26% compared to a year ago. Every region outside London and the South East is lagging the UK average, with annual growth of between 5% and 10%.