The construction sector activity in the UK economy unexpectedly increased its pace of expansion in the month of June, a fresh report from Markit Economics showed on Tuesday.

The final Purchasing Managers' Index (PMI) came in at 53.1 in June, up from 52.5 seen in May and much better than a reading of 52.5 expected.

Key Points:

House building remains best performing area of activity.

New orders rise at fastest pace since May 2017.

Input cost inflation accelerates in June.

Tim Moore, Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI®, noted: “The latest increase in UK construction output marks three months of sustained recovery from the snow-related disruption seen back in March. A solid contribution from house building helped to drive up overall construction activity in June, while a lack of new work to replace completed civil engineering projects continued to hold back growth."

“Of the three main categories of construction work, commercial building was sandwiched in the middle of the performance table during June. Survey respondents suggested that improved opportunities for industrial and distribution work were the main bright spots, which helped to offset some of the slowdown in retail and office development.”