September UK construction sees biggest upturn since April 2022



Construction saw the biggest upturn since April 2022 according to the September’s S&P Global UK Construction PMI.


According to the data, UK construction accelerated to its fastest level for almost two-and-a-half years, while new work also grew, which the report attributed to an increased willingness to spend among clients as well as a more supportive economic backdrop.

Commercial building rise to its highest point since May, despite respondents noting tight budgets — a number of firms cited lower borrowing costs and domestic political stability as having positive impacts on client spending.

Housebuilding was also boosted, with the latest upturn in residential work being the strongest since March 2022, but still softer than other areas of the sector.

Civil engineering was the best performing category of the construction sector.

Also seeing its strongest upturn in two-and-a-half years was total new orders, and with greater workloads came a boost in staff recruitment, despite some firms noting cost pressures causing delays to the replacement of voluntary departures — employment figures have now increased in four of the five last months.

Input costs saw their highest growth since May 2023, and increased for the ninth month in a row. Companies commented on higher prices paid for a range of raw materials, as well as the pass-through of higher wages by suppliers  — rates charged by subcontractors, however, increased marginally at the slowest pace so far in 2024.

Tim Moore, economics director at S&P Global Market Intelligence, said: "UK construction companies indicated a decisive improvement in output growth momentum during September, driven by faster upturns across all three major categories of activity.

"A combination of lower interest rates, domestic economic stability and strong pipelines of infrastructure work have helped to boost order books in recent months.”

Guy Murray, head of development finance at West One, also said: "Momentum is building in UK construction.

“The latest S&P Global UK construction PMI figures the show the fastest growth rate of business growth for nearly two and a half years, clearly confidence is on the up and that can only be good news for the UK construction sector.

“No doubt, interest rates coming off their peak, a more resilient UK economy than many had predicted and the new government's desire to get the construction sector moving is having an impact across housing, civil engineering and commercial projects.

“The only note of caution is the reported rise in input costs which grew at the fastest rate in 16 months and will act as a headwind that firms will need to monitor.

“Overall though, the hope is that the strong headline data will translate to more starts and spades in the ground over the coming months and that momentum continues to gather and meet the UK's clear need to build."

 



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