UK construction sector 'turns corner' - PMI

5th Sep 2024 07:59

(Sharecast News) - The UK construction sector's recovery continued in August, a closely-watched survey showed on Thursday, although the rate of expansion eased.

The latest S&P Global UK construction purchasing managers' index was 53.6, below forecasts for 54.9 but comfortably above the neutral 50.0 level. A reading below 50.0 suggests contraction, while one above it indicates growth.

In July, the construction PMI was 55.3, a 26-month high.

S&P Global said firms had reported a "sustained" rebound in total business activity in August, helped by "robust" new order growth and a more supportive economic backdrop.

The index for residential sector - boosted by lower borrowing costs and improving market conditions - came in at 52.7, the highest level since September 2022

The best performing sector remained commercial, however, with the index at 53.7, despite the pace of growth slowing to its lowest since March. The Civil engineering index was 51.8.

Respondents also remained confident looking forward, with 50% expecting a rise in output in the coming year and just 9% forecasting a reduction.

Tim Moore, economics director at S&P Global Market Intelligence, said: "The UK construction sector appears to have turned a corner after a difficult start to 2024, with renewed vigour in the house building segment the most notable development.

"Improving sales pipelines and a turnaround in demand conditions led to a relatively strong degree of business optimism across the sector.

"However, some firms cited a slowdown in civil engineering activity and concerns about the outlook for infrastructure work as constraints on growth expectations."

The data were collected between 12 and 29 August. Surveys were sent to a panel of around 150 construction companies.