Construction activity rebounded surprisingly strongly in February. At 54.6, the sector PMI was more than six points higher than January's 48.4 and well above the 50-expansion threshold. This signalled the fastest growth of business activity since last May.

Commercial work (55.3) was the best performing category but civil engineering (52.3) also had a decent month. However, gains here contrasted with another decline in house building (47.4) for a third straight month, albeit at a less marked rate than at the start of the year.

Aggregate new orders rose for the first time since November 2022 and both purchasing activity and employment were similarly slightly firmer. Moreover, with vendor delivery times the least widespread in just over three years, an increase in input costs was the smallest since November 2020. Against this backdrop, business confidence improved further and hit its highest level in a year.

Overall, the February results are surprisingly bullish but housing is clearly struggling and the prospect of still higher interest rates makes for an uncertain outlook for demand. Nonetheless, today's update leaves both the ECDI (36) and ECDI-P (46) well above zero and indicative of overall real economic activity running comfortably ahead of market expectations.

The headline index is seen at 49.1 in February, up from 48.4 in January.

The Construction Purchasing Managers' Index (PMI) provides an estimate of business activity in the UK construction sector for the preceding month based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 170 construction companies. The panel is stratified geographically and by Standard Industrial Classification (SIC) group, based on the regional and industry contribution to gross domestic product. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The data are compiled by the Chartered Institute of Purchasing and Supply (CIPS) and S&P Global.

The survey is based on techniques successfully developed in the USA over the last 60 years by the National Association of Purchasing Management. It is designed to provide one of the earliest indicators of significant change in the economy. The data collected are not opinion on what might happen in the future, but hard facts on what is actually happening at 'grass roots' level in the economy. As such the information generated on economic trends pre-dates official government statistics by many months.