UK construction output increased in May, despite weakness in the house building sector.
The S&P Global/CIPS UK Construction Purchasing Managers’ Index (PMI) rose to 51.6 from 51.1 in April and above the no-change 50.0 mark for the fourth consecutive month. This was the strongest upturn in total construction activity since February.
According to the data, last month’s growth was driven by commercial building and civil engineering activity as firms registered the strongest rise in new orders since April 2022.
House building remained by far the weakest-performing category, with output declining at the steepest rate since May 2020.
This decline followed cutbacks to new residential building projects in response to rising interest rates and subdued housing market conditions, explained Tim Moore, economics director at S&P Global Market Intelligence, which compiles the survey.
As a result, residential work underperformed the rest of the construction sector by the greatest margin since October 2008.
“Though overall output in the construction sector showed an improvement for the fourth month in a row, the steepest drop in house building activity since April 2009, barring the initial pandemic lockdown in early 2020, will send a chill down the spine of the UK economy,” added Dr John Glen, chief economist at the Chartered Institute of Procurement & Supply (CIPS).
