U.K Construction Once Again Increasing In Volume In The Face of Lackluster Housebuilding Projects

May 8, 2024

In April, the construction sector experienced its most significant expansion in over a year, according to S&P’s purchasing managers’ index (PMI). The overall PMI for the construction industry rose to 53.0, up from 50.2 in March, indicating growth.

Among the various segments, commercial construction saw the most robust growth, with a score of 53.9. This was driven by increased customer demand, particularly for refurbishment projects, as confidence in the UK’s economic outlook improved.

Similarly, civil engineering activity also saw notable expansion, reaching its strongest pace in nine months with a score of 53.6.

However, the housebuilding sector continued to face challenges, marked by a decline to 47.6 in the housebuilding survey, its sharpest rate of decline since January. This ongoing struggle is attributed to factors such as high interest rates and sluggish market conditions, which have impacted demand for new homes.

Despite the overall growth in output and new projects, the survey indicated a marginal reduction in employment numbers. This decrease in staffing levels was often due to non-replacement of voluntary leavers amid cost pressures and the completion of major projects.

Looking ahead, optimism among construction firms edged up in April, with nearly half of the survey panel anticipating a rise in output over the next year. This sentiment was driven by improving sales enquiries and hopes for potential interest rate cuts, though challenges in the housing market persist.