Following years of struggling after the credit crunch, the UK construction sector now seems to be steadily improving.
The latest Markit/CIPS construction purchasing managers' index (PMI) jumped to 59.4 in October from 58.9 in September. This is the sharpest upturn seen since September 2007 and was a much stronger result than economists had predicted. Furthermore, it marks the sixth consecutive month of improvement in the sector, giving hope that the recovery is on a more solid trajectory.
Markit economist Tim Moore commented: “UK construction output continues to rise like a phoenix from the ashes, with housing, commercial and civil engineering activity all seeing strong rates of expansion at the start of the fourth quarter.”
The improvement has changed the playing field for those looking to buy distressed businesses in the construction sector, a phenomenon the Business Sale Report has explored in more detail here.
Meanwhile, as consumer access to credit improves, construction businesses are capitalising on the fresh round of investment heading their way. In Plymouth, for example, the city council is planning to start a fund to help developers deliver on targets to build 1,000 new houses a year.
The city is due to borrow around £50 million cheaply and lend it to housing cooperatives and associations at a below market rate of around three per cent.
Councillor Mark Lowry, a cabinet member, told the Plymouth Herald: “There is a housing crisis and we need to speed up housing developments. We need a mixture of affordable homes, family homes, executive properties, student accommodation and extra care housing.”
He added that “cash flow is king” for any business. Providing access to cheaper funding should help to keep businesses moving in the construction sector and could tempt some entrepreneurs to buy a construction business in the area to capitalise on the cash injection. 
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