Construction activity continued to motor ahead at a respectable pace in mid-quarter. At 53.6, the August sector PMI was above the 50-expansion threshold for a sixth straight month, albeit down from July's 54.3, itself a 26-month high. The latest reading was also 0.8 points short of the market consensus.

All of the three main categories posted fresh positive growth, led by commercial building (53.7). Residential construction (52.7) actually enjoyed its best month in nearly two years but civil engineering (51.8) slowed markedly.

August saw another healthy increase in new orders, in part attributed to a more stable political environment. Confidence was also well up on a year ago but sub-contractor usage still fell for the first time since January and higher wage pressures helped to hold headcount flat after three successive rises. Even so, overall input costs eased versus July.

While on the soft side of expectations, the August results remain relatively upbeat and, depending upon the speed with which the BoE cuts Bank Rate, look likely to stay that way through year-end. Today's data put the UK RPI at exactly zero and the RPI-P at 8, both readings showing recent economic activity in general performing much as forecast.

The sector PMI is expected to slip from 55.3 to a still solid 54.4.

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.