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The UK construction industry returned to growth in September, according to surprisingly positive new data on Thursday.
The S&P Global/CIPS UK construction purchasing managers' index rose to 52.3 in September, from 49.2 in August. The reading rose above the 50.0 no-change mark, showing the sector has returned to growth.
FXStreet-cited consensus had been expecting 48.0, which would have indicated further decline.
However, the increase was fuelled more by the completion of delayed projects and easing supply shortages, rather than new orders, according to Tim Moore, S&P Global Market Intelligence's economics director.
Reports of delivery delays for construction products and materials were at their lowest levels since the onset of Covid. This was due to larger business capacity and better availability of transport, which helped to ease the pressure on the supply chain.
Whilst the headline reading was better than expected, the outlook for the sector is likely to disappoint.
‘Forward-looking survey indicators took another turn for the worse in September, with new business volumes stalling and output growth expectations for the year ahead now the lowest since July 2020. This reflected deepening concerns across the construction sector that rising interest rates, the energy crisis and UK recession risks are all set to dampen client demand in the coming months,’ Moore warned.
The construction PMI is compiled from responses to surveys sent to around 150 UK construction firms, with data collected between September 12 to 29.
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