LONDON (Reuters) - British construction activity grew at its fastest rate in four months in June, and confidence in the sector surged to an 11-year high, as growth resumed after a lull in the run-up to May's national election.
The monthly Markit/CIPS Purchasing Managers' Index (PMI) rose to 58.1 in June from 55.9 in May, its biggest increase in a year and exceeding all forecasts in an earlier Reuters poll.
"The extent of the recent rise in construction optimism is partly down to relief that pre-election uncertainty has now passed, but it also suggests that firms are infused with confidence that underlying demand will continue to recover," said Tim Moore, an economist at financial data company Markit.
Growth was fastest in the house-building sector, but civil engineering projects and commercial work were catching up quickly.
New orders flowed in at the strongest rate since last October, while there was increasing evidence of skills shortages, rising labour costs and lengthier delivery times for building supplies.
Official data on Tuesday showed that British construction output fell slightly in the first three months of 2015, though compared with a year earlier it was up by a robust 4.5 percent.
Construction fell sharply in Britain after the financial crisis, and levels of house building are still well below what most analysts consider necessary levels to meet demand from a growing population.