Finance & Business World

A U.K. index of construction rose to the highest level in 13 months in May as the pace of declines in the housing market eased, Markit said.

The gauge, based on a survey of more than 170 construction purchasing managers, rose to 45.9 from 38.1 in April, Markit and the Chartered Institute of Purchasing and Supply said in an e- mailed statement in London today. While readings below 50 still indicate a contraction, May’s figure shows the slowest pace of declines since April 2008.

“We are starting to see the construction economy show some signs of life and steer itself back onto the road of recovery,” Roy Ayliffe, director at CIPS, said in the statement. The data show “murmurs of a possible upturn in house-building activity,” he said.

The report adds to evidence Britain’s recession is easing instant cash advance. Mortgage approvals rose to the highest level in a year in April and Hometrack Ltd. says house prices stopped falling in May. Rising unemployment may still curb Britain’s recovery, former Bank of England policy maker David Blanchflower said yesterday.

The homebuilding index rose to 48.5, from 33.7 in April, a record increase, Markit said. The gauge of commercial construction increased to 45.3 from 36.5.

Banks granted 43,201 home loans in April compared with 40,038 the previous month, the Bank of England said today in London. Average house prices in England and Wales held at 155,600 pounds ($255,000) in May, Hometrack said yesterday.

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A U.K. manufacturing index rose more than economists forecast in May to the highest in a year, adding to signs that the recession may be past its worst.

A gauge based on a survey of factories climbed to 45.4 from 43.1 in May, the Chartered Institute of Purchasing and Supply and Markit Economics said today in London. Economists predicted 44, the median of 25 forecasts in a Bloomberg News survey shows.

The report reinforces evidence that the recession is easing, after the economy contracted the most in a generation in the first quarter. The Bank of England may decide this week to leave the key rate at a record low and continue a 125 billion- pound ($204 billion) bond-purchase plan to nurture a recovery.

“We may get a positive number sometime soon though a proper recovery is still some way off,” said Alan Clarke, an economist at BNP Paribas SA in London. “There will be no change in the Bank of England decision this week. There is still a lot of spare capacity in the economy faxless payday loans.”

London-based Invensys Plc said May 14 it will pay its first dividend for six years after orders rose 38 percent from a year earlier on contract wins for equipment to automate refineries and railways.

A separate report today by Hometrack Ltd. showed house prices stopped falling in May for the first time in 20 months.

Former Bank of England policy maker David Blanchflower said today he still sees “risks to the downside” in economic growth as unemployment soars by an average of about 100,000 jobless claims a month for at least the rest of this year.

Policy makers will decide on June 4 to refrain from expanding their money-printing plan, according to all but two of 39 forecasts in a Bloomberg News survey of economists. A separate survey showed the bank will keep the key rate at 0.5 percent.

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