INCREASED housebuilding is fuelling record construction jobs, a report has revealed.

Companies are recruiting workers at their fastest pace for nearly 20 years, with new homes being built at their sharpest rate since November 2003.

The figures, from a Markit/CIPS Construction PMI survey, said strong demand for housing helped the construction industry expand at a seven-year height.

Loading article content

The report revealed a reading of 62.4 for July, slightly down from June’s 62.6, though the figure was well above the 50 mark used to signify growth.

It added civil engineering work also grew at a sharper rate last month, with new orders continuing on an increased trajectory.

Tim Moore, Markit senior economist, acknowledged the positive figures, but warned companies must now ensure they have enough skilled workers and materials to cover the growth.

He said: “July’s figures suggest the UK construction sector is enjoying its strongest cyclical upswing since the global financial crisis.

“A new record rise in employment also highlights firms are increasingly confident about the sustainability of the upturn.

“But a pressing concern is the availability of materials and suitably skilled labour to support the recent growth streak.

“However, the survey adds to the view construction companies have performed impressively so far this summer, raising the likelihood the sands of time could wash away the weakness seen in the preliminary second quarter GDP release.”

Despite the strong figures, the report revealed a fall in the number of sub-contractors for the 13th consecutive month, with rates for their services increasing at nearly record pace.

Chris Williamson, Markit chief economist, said it showed the industry was still recovering.

He added: “The survey fires some warning shots in relation to inflation.

“Rates charged by sub-contractors are rising at a near-record pace and prices paid for construction materials are increasing sharply.

“The upturn in activity has led firms to lift their use of subcontractors, although a shortage of suitable workers has led to companies facing sharp increases in pay rates.

“The availability of sub-contractors deteriorated in July to one of the greatest extents seen in the survey’s history.

“But it’s not just staff shortages causing costs to rise.

“Dwindling availability of materials, especially bricks, is feeding through to higher prices in many cases.

“Delivery times for materials from suppliers lengthened markedly again in July, and have shown the greatest deterioration ever seen by the survey in recent months.”