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Activity in the UK construction sector improved month-on-month in July, survey data showed on Friday.
The S&P Global/CIPS UK construction purchasing managers’ index rose to 51.7 points in July up from 48.9 points in June. Rising above the 50-point no-change mark, the survey reading shows the sector in expansion territory.
The reading marks the highest level for five months. However, S&P noted that the latest reading signalled only a moderate rise in overall construction output.
‘This was led by the strongest rise in commercial building since February and another solid contribution to growth from civil engineering activity,’ S&P said.
Further, softer demand and fewer supply bottlenecks led to the fastest improvement in vendors’ delivery times since March 2009.
However, survey respondents noted that higher interest rates and the uncertain UK economic outlook had constrained order books in July.
John Glen, chief economist at the Chartered Institute of Procurement & Supply, commented: ‘Although the sector showed a slight uplift in activity in July, there is a question mark over the sustainability of this growth and the challenges that lie beneath the floorboards.
‘Decisions about buying a new home are being delayed by many consumers. Another fall in residential building levels and for the eighth month in a row, it’s obvious that UK interest rate rises and cost of living pressures have dealt a hammer blow to the housing sector. The commercial and civil engineering sectors remained the only engines of growth last month.’
The UK construction PMI is compiled by S&P Global from responses to surveys sent to 150 construction companies, with data collected between July 12 and 28.
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