232: October PMI data shows rampant UK construction

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LONDON, Nov 10 (Reuters) - UK building construction picked up at its fastest pace in seven months in October and looks set to accelerate further in the months ahead, a survey of business conditions in the commercial property investment sector showed on Friday.

Property agency Savills Plc (SVS.L: Quote, Profile, Research) said its Total Commercial Activity index leapt to 61 in October from 59.3 in September -- a tenth straight month above the 50 mark denoting no growth.

The Savills PMI survey showed construction growth was driven largely by the private sector but also featured the sharpest expansion of building in the public sector -- largely leisure facilities -- since the survey began in March 2003.

The report also showed commercial developers were more optimistic about the next three months than in September, with confidence strongest for office construction work.

Development activity in London, with its crane-dotted skyline, reached a survey high, the data showed.

Mat Oakley, director of research said the improvement showing in October was all the more startling given widespread expectations -- subsequently realised -- of another quarter-point rise in UK interest rates on Thursday.

"Evidently they (developers) expect that this is likely to be the peak in the cost of money in the short term," he said.

The monthly survey of leading UK property contractors and developers is conducted for Savills by NTC Research, which also produces widely tracked Purchasing Managers' Indexes on Europe's manufacturing and service sectors.

As with NTC's other surveys, the 50 mark divides growth from contraction.

Source:

Reuters.co.uk