UK construction ‘appears to have turned a corner’ after difficult start to 2024

That’s according to the latest survey of construction buyers in the country. S&P Global’s UK Construction Purchasing Managers’ Index (PMI), which measures activity levels in the sector, registered a score of 53.6 in August (where a value of 50.0 indicates no change).

It was the sixth month running that the index was in positive territory and while the pace of expansion eased from the 26-month high of 55.3 recorded in July, S&P Global said that “robust” new order growth and a more supportive economic backdrop indicated a recovery in construction volumes.

Commercial activity was the best-performing segment (scoring 53.7), despite the pace of growth slipping to its lowest level since March. Companies noted rising sales enquiries and a release of new orders following the general election.

Civil engineering activity scored 51.8 although it expanded at a “notably weaker” pace than in July.

Residential work grew momentum, accelerating to its fastest since September 2022 (52.7), supported by lower borrowing costs and improved market conditions.

Survey respondents suggested that improving economic conditions and greater domestic political stability had lifted customer demand.

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 in August.

“Improving sales pipelines and a turnaround in demand conditions led to a relatively strong degree of business optimism across the construction sector. However, some firms cited a slowdown in civil engineering activity and concerns about the outlook for infrastructure work as constraints on growth expectations.”