UK Construction Activity Grows at Fastest Pace for More than a Year

Posted on 15 May 2024

April saw the construction sector experience its most rapid growth in 14 months, as indicated by PMI data. This marks the second consecutive month of increased business activity, with civil engineering showing its strongest performance in nine months, according to the latest S&P Global UK Construction PMI figures.

The headline figure for April stood at 53.0, up from March's 50.2, marking the sharpest growth since February 2023. A reading of 50.0 on the seasonally adjusted index suggests no change in activity

Tim Moore, economics director at S&P Global Market Intelligence, attributed the heightened demand to improved confidence in the wider UK economic landscape. Commercial and civil engineering segments drove the growth, reflecting robust expansion rates. This growth coincides with reports of enhanced domestic conditions fueling sales.

Max Jones, director of Lloyds Bank’s infrastructure and construction team, said: “Confidence among contractors is heading in the right direction as inflation moves to more manageable levels for the sector.”

Aecom head of cost management Brian Smith said: “A second month at or above 50 and continued improvement since December demonstrates some resilience to the sector, despite the overall stuttering economy and poor weather.”

Commercial construction outpaced the overall market, reaching an index of 53.9 in April. Survey respondents highlighted increasing workloads and customer demand, particularly in refurbishment projects. Civil engineering also showed significant improvement, with an index of 53.6, marking its strongest growth in nine months. Shortened supplier lead times were attributed to improved material availability.

However, housebuilding lagged, registering an index of 47.6, the largest decline in residential construction since January. High borrowing costs and sluggish market conditions were cited as contributing factors.

Despite this, respondents remained optimistic about future business prospects, with nearly half anticipating increased output over the next year, while only 11 per cent predicted a decline.

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