The Markit/CIPS Purchasing Managers’ Index (PMI) for the construction sector showed a sharp improvement in new business.

Posting at 59.1 in August, up from July’s 57.0 with residential construction remaining the strongest performing sector.

CIPS CEO David Noble, “A new dawn is breaking in construction. The industry recorded the fastest pace of growth since 2007 in August, leaving the dark days of recession behind. Builders have seen a step change in recent months and are now starting to show their true potential to the UK economy. Nowhere is this more true than in new business, where growth is at its second-strongest in almost six years, leading to more jobs and increasing confidence.

“Robust expansion can be seen in all three sub-sectors; house building is rising at a rate not seen since mid-2010, commercial growth is also strong, but it is the strongest growth in six years recorded in civil engineering that is a real cause for optimism and a sure sign the sector has overcome its previous difficulties.

“This new direction brings new challenges, not least the prospect of additional work and insufficient capacity to meet demand. How the sector navigates these tensions and manages the supply chain could come to define its performance over the coming months.”

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