Growth has accelerated in the UK construction sector after entering the second half of the year. The month of July saw much faster increases in both activity and new orders.
The headline S&P Global UK Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index tracking changes in total industry activity – rose sharply to 55.3 in July from 52.2 in June.
The reading signalled a marked monthly expansion in total activity in the construction sector, extending the current sequence of growth to five months. Significantly, the rate of expansion was the fastest since May 2022.
All three categories of construction saw activity increase in July as work on housing projects returned to growth.
Commenting on the latest data, S&P Global Market Intelligence, economics director Andrew Harker said: “The election-related slowdown in growth seen in June proved to be temporary, with the pace of expansion roaring ahead in July. Firms saw the strongest increases in new orders and activity since 2022 as paused projects were released amid reports of improved customer confidence.”
He added: “The strength of demand moved the sector closer to capacity, bringing a recent period of improving supplier performance to an end. There were also signs of inflationary pressures picking up, something that will need to be watched closely if demand strength continues in the months ahead.”
Shawbrook managing director of development finance Terry Woodley welcomed the rise in figures from the latest S&P Construction PMI.
“Positive developments in the sector such as renewed housebuilding targets and the newly announced Planning and Infrastructure Bill have helped address longstanding concerns from developers, chiefly surrounding the planning process which has made it difficult for developers to push forward with plans.
Our latest research, conducted amongst 500 developers, found that over a third (39%) have reported waiting times of four to six months for planning permission to be granted, with a similar number (33%) claiming they’ve waited for 7-12 months. Hopefully this should soon see a shift, with red tape being loosened due to these newly announced changes.”
