The UK construction sector experienced growth for four months in a row by June 2024, as measured by a key metric.
- The S&P Global UK Construction PMI recorded a reading of 52.2, indicating overall sector expansion.
- Commercial work spearheaded the growth, with civil engineering also contributing positively.
- Despite the overall growth, housing activity saw a downturn after a brief recovery in May.
- Industry experts maintain an optimistic outlook, emphasising improved employment and easing inflationary pressures.
In June 2024, the UK construction industry witnessed its fourth consecutive month of growth, as reflected in the S&P Global UK Construction Purchase Manager’s Index (PMI), which notched a reading of 52.2. This figure is indicative of sustained growth within the sector, although the momentum has slightly decreased compared to May.
Commercial projects played a pivotal role in driving the construction activity upwards, complemented by an increase in civil engineering works. However, the housing sector struggled, slipping into a downturn just after a brief uptick in May, marking the end of a 19-month decline.
The construction firms have responded to the overall growth by increasing employment, with job creation rates reaching a peak since August of the previous year. Andrew Harker, economics director at S&P Global Market Intelligence, remarked on the continuous expansion during the second quarter, attributing any slowdown in new order growth partly to election uncertainties. A post-election period may bolster these figures, he suggested.
The financial director at Beard, Fraser Johns, articulated that the ongoing growth, even amid housing sector challenges, highlights the sector’s resilience. He stressed that easing inflationary pressures and favourable supply chain conditions are vital in maintaining this upward trajectory.
Meanwhile, Jordan Smith, technical director at Thomas & Adamson, noted the disparities between the growth figures and the on-ground reality, which still faces material shortages and a tight labour market. Yet, a cautious optimism pervades the sector as impending elections and other variables become clearer.
The UK construction sector’s growth persists despite housing setbacks, buoyed by commercial demand and employment gains.
