Confidence in the property market continues to rise as
construction firms hire workers at the fastest pace for six years,
according to a new survey by Markit.

British construction firms have enjoyed their fastest growth
since the financial crisis, with house-building, civil engineering
and commercial projects all enjoying boosts in October. The
Markit/CIPS UK Construction PMI output measure came in at 59.4, up
58.9 in September and above the 50 threshold for growth vs.
contraction for a sixth straight month.

Construction firms say the improved economic conditions have
helped to boost output, client spending and recruitment, taking on
workers in a bid to satisfy growing demand.

Tim Moore, senior economist at Markit, said: "UK construction
output continues to rise like a phoenix from the ashes, with
housing, commercial and civil engineering activity all seeing
strong rates of expansion at the start of the fourth quarter."

The economy grew by 0.8 per cent in the third quarter and is
likely to continue for the remainder of this year. However, critics
argue that strains on consumer spending, as a result of rising
household bills and low pay growth, could put a dent in continued
recovery:

"While evidence that the construction sector is continuing to
gain momentum is good news for overall growth prospects, it needs
to be remembered that the sector only accounts for 6.3% of national
output," said Howard Archer, economist at IHS Global Insight.

"Nevertheless, the survey lifts hopes that the construction
sector will help the economy to see further decent GDP growth in
the fourth quarter, even if it is likely to struggle to maintain
the robust expansion rates seen in the third (0.8%
quarter-on-quarter) and second (0.7% quarter-on-quarter)
quarters."

David Tinsley, economist at BNP Paribas, added: "The first print
of third-quarter GDP showed a 2.5% rise in construction output.
With the housing market in an upswing phase and the strength of the
construction PMI continuing into fourth quarter, the sector should
be able to make at least a similar-sized gain in activity
again."

As the economy continues to grow, areas outside of London have
begun to reap from improved commercial property performance. During
the recession, London
was viewed as a safe haven for commercial property investors,
with guaranteed returns, but now cities like Birmingham, Manchester
and Liverpool are seeing upturns, too.

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