Nov. 2 (Bloomberg) -- U.K. construction output unexpectedly strengthened in October as new business increased, boosting employment in the sector.
A gauge of building activity based on a survey of purchasing managers rose to a five-month high of 53.9 from 50.1 in September, Markit and the Chartered Institute of Purchasing and Supply in London said in a report today. The median forecast of nine economists in a Bloomberg News survey was for a reading of 50, which is the dividing line between expansion and contraction.
The U.K. economy grew faster than economists forecast in the third quarter, expanding 0.5 percent, according to data yesterday. Still, the escalating debt crisis in Europe is threatening to push Britain back into recession and the Bank of England increased emergency stimulus for the first time in two years last month.
“Reports of new contract wins from previously quoted projects and some advance orders for 2012 led to the steepest increase in new business since the spring,” CIPS Chief Executive Officer David Noble said in a statement. “Due to current economic conditions, it may be some time yet before we start seeing the sustained growth the sector really needs.”
Bank of England Markets Director Paul Fisher said last week there’s a “50-50” chance the economy will shrink in the current quarter. A U.K. manufacturing index fell to a 28-month low in October as new orders decreased, Markit said yesterday.
Bellway Plc, the U.K. homebuilder focused on first-time buyers, said on Oct. 18 that annual profit rose 51 percent after the company sold more homes at higher prices.
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