UK construction sector expands at fastest pace in more than a year

(Sharecast News) - The UK construction sector expanded in April at its fastest pace in more than a year, according to a survey released on Tuesday. The S&P Global construction purchasing managers' index rose to 53.0 from 50.2 in March. This marked the second month in a row it was in positive territory and the strongest pace of expansion since February 2023.

A reading above 50.0 signals expansion, while a reading below indicates contraction.

The index for commercial building rose for the first time since August 2023 - to 53.9 in April from 49.9 in March - and it was the fastest-growing area of construction last month. Survey respondents cited a turnaround in customer demand, in part driven by refurbishment projects.

Meanwhile, the civil engineering activity index printed at 53.6, revealing the strongest pace of expansion for nine months.

The index for housebuilding ticked down to 47.6 from 49.9 amid a moderate decline in residential building work, although the rate of decline was the steepest since January. Construction companies highlighted sluggish market conditions and the impact of high borrowing costs.

Tim Moore, economics director at S&P Global Market Intelligence, said: "The construction sector consolidated its recent return to growth in April, with total industry activity rising at the fastest pace for 14 months amid an ongoing recovery in order books. Demand was boosted by greater confidence regarding the broader UK economic outlook. Commercial construction outperformed in April and civil engineering also provided a solid contribution to overall growth.

"Lacklustre market conditions in the house building segment continued to weigh on activity. The latest survey pointed to the fastest reduction in residential building work since January, although the speed of the downturn remained much softer than in the second half of 2023."

Moore said hiring trends were subdued despite a recovery in workloads, which mirrored trends seen in other part of the UK economy, as construction firms sought to maintain a tight focus on costs against a backdrop of strong wage pressures.