The British construction activities unexpectedly jumped in March as the increase in new orders accelerated the latest and fastest growth in four and a half years, according to the latest data released from Markit/Chartered Institute of Purchasing & Supply.

UK firms became more optimistic about the outlook indicating that Britain's economy is on track for recovery. The seasonally adjusted construction purchasing managers' index rose to 56.7 in March, up from 54.3 in February.

UK Construction PMI
UK Construction Activity Hits Fastest Growth Pace in Four and a Half Years

The data pointed to the sharpest expansion of output in 21 months and the reading was above the 50 level that divides growth from contraction in each month since January 2011 and above the economists' expectations of 53.4 surveyed by Bloomberg.

Markit/CIPS Construction
Performance of UK Construction PMI

"The unexpectedly strong rise in new orders has been a boon to the confidence of construction purchasing managers, which reached a 22-month high in March, albeit was still lower than pre-recession levels. Driven by stronger growth in activity in the commercial and civil engineering sectors and positive sounds from customers at the end of what has been a much brighter first quarter for construction, the modest rise in employment shows that companies are now starting to develop an appetite for expansion. However, some supply side constraints remain, with suppliers unable to speed up the delivery of materials. Furthermore, continued upward pressure on input prices remains," said David Noble, CEO at Chartered Institute of Purchasing & Supply.