UK construction sector maintains growth in August ’24

The UK construction sector continued its recovery in August 2024, with the S&P Global UK Construction PMI registering at 53.6.

While this is a decrease from July’s 26-month high of 55.3, it still indicates solid growth in overall construction activity.

Robust new order growth and improved economic conditions supported the sector’s expansion. Commercial activity led the way with an index of 53.7, though growth slowed to its lowest pace since March.

Residential construction saw a notable acceleration, reaching its fastest growth since September 2022, driven by lower borrowing costs and improving market conditions. Civil engineering activity expanded more slowly, reflecting weaker performance compared to July.

Employment numbers stagnated as firms delayed filling vacancies due to cost concerns, while subcontractor usage decreased for the first time since January.

Purchasing price inflation eased, with input buying expanding solidly amid rising workloads. Suppliers’ delivery times improved on average, despite some reports of constrained haulage capacity.

Tim Moore, Economics Director at S&P Global Market Intelligence, highlighted the sector’s resilience and the positive outlook for future activity.

However, he noted concerns about slower growth in civil engineering and infrastructure spending. Despite these challenges, business optimism remains strong, with 50% of firms expecting increased output over the next year.