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UK construction saw a mild expansion in activity in August, according to survey data on Wednesday, but the slump in the housebuilding sector continued.
The S&P Global/CIPS UK construction purchasing managers’ index fell to 50.8 points in August, from 51.7 in July. Falling closer towards the 50-point mark that separates expansion from contraction, it shows growth slowed during the month.
The survey compiler, S&P Global, noted ‘divergent trends’ across the three main surveyed categories. Commercial building expanded at a ‘robust’ pace, with a PMI of 54.2. Civil engineering grew, but at a somewhat slower pace, with a PMI of 54.2.
However, housebuilding continued to contract, with a PMI of 40.7. This was the second-fastest downturn since May 2020. ‘Survey respondents widely commented on subdued market conditions and a headwind to activity from cutbacks to new build projects,’ S&P Global said.
‘Resilient demand for commercial work and infrastructure projects are helping to keep the construction sector in expansion mode for now, but the survey’s forward-looking indicators worsened in August,’ warned S&P Global Market Intelligence economics director Tim Moore.
New orders fell at the fastest pace in over three years as respondents cited concerns over the macroeconomic outlook and the effects of high interest rates. The degree of positive sentiment was the lowest recorded since the beginning of 2023.
On a more positive note, input costs stabilised across the sector, and suppliers’ delivery times saw a sharp improvement.
The UK construction PMI is compiled from responses to surveys sent to around 150 construction companies, with responses collected in the second half of each month.
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