Data released by S&P Global / CIPS showed that activity in the construction sector improved sharply in April, exceeding economists' forecasts, and reaching the highest level since February 2023 amid an ongoing recovery in order books. Demand was boosted by greater confidence regarding the broader UK economic outlook.
UK construction PMI rose to 53.0 points from 50.2 points in March. Economists had expected an increase to 50.4 points. An index value above 50 points indicates an expansion of activity in the sector.
The report showed that among the three main categories of construction activity, commercial building (index at 53.9) increased for the first time since August 2023 and was the fastest-growing area of construction activity. Civil engineering activity (index at 53.6) meanwhile expanded again in April and at the strongest pace for nine months. The latest survey signaled a setback for house building activity (index at 47.6). Meanwhile, new orders in the construction sector rose again in April, but the growth rate slowed compared to March. Staff numbers continued to decline last month, but the rate of job shedding was only marginal. Lower staffing levels were often linked to the non replacement of voluntary leavers, due to cost pressures and the completion of major projects. The data also showed that the overall rate of cost inflation was only modest and well below the long-run survey average. As for the prospects of business activity for the next 12 months, almost half of the respondents predict an increase in production, and only 11% predict a decrease.