U.K. Outlook Raised by CBI as Construction Strengthens: Economy

Below is just a portion of the article that’s up on Bloomberg this morning….

U.K. Outlook Raised by CBI as Construction Strengthens: Economy

By Scott Hamilton & Eshe Nelson - Nov 4, 2013 6:05 AM ET

The Confederation of British Industry raised its forecasts for U.K. economic growth and said business investment and trade will aid the recovery starting next year.

The business lobby sees the economy expanding 1.4 percent this year and 2.4 percent in 2014, it said in a quarterly report. That’s up from 1.2 percent and 2.3 percent in August.

The projections came as a survey from Markit Economics showed construction unexpectedly strengthened in October to the fastest rate in six years, led by homebuilding.

Construction Growth

Markit said its index of construction activity rose to 59.4 in October from 58.9 in September. The median forecast of 15 economists was for a decline to 58.7. The gauge has been above the 50 level that divides expansion from contraction since May.

The improvement boosted hiring, with payrolls rising at the fastest pace in six years, Markit said. While housing growth cooled from its fastest in almost 10 years, it remained the strongest sector. Civil engineering and commercial activity were “robust,” it said.

Homebuilder Bellway Plc (BWY) said on Oct. 15 that its annual profit rose 37 percent as it benefited from the government’s Help to Buy initiative. The measure is aimed at helping people to buy homes with small deposits, and Bellway said that demand “remains strong in most areas of the country.”

The government program is also boosting house prices and has faced criticism that it may fuel a property bubble. Nationwide Building Society said on Oct. 31 that values rose 1 percent in October from the previous month and were up 5.8 percent from a year earlier.