Data released by S&P Global / CIPS showed that activity in the construction sector improved in November. However, new order growth eased to a 5-month low and business activity expectations were the least upbeat since October 2023.
UK construction PMI rose to 55.2 points from 54.3 points in October. Economists had expected a decline to 53.6 points. An index value above 50 points indicates an expansion of activity in the sector. The index demonstrates the expansion for the 9th month in a row. The latest reading was also well above the average seen in the first half of 2024 (51.4) and signaled a solid expansion of total industry activity.
The report showed that two of the three categories of construction recorded expansion activity in November. Commercial work (index at 58.2) was the best-performing category - the sector recorded the strongest growth in 2.5 years. Civil engineering activity (55.9) also expanded at a strong pace in November. That said, the rate of growth slipped to a three-month low. House building (47.9) remained by far the weakest-performing category of construction work in November.
New orders in the construction sector rose again in November (for the 10th month in a row), but the rate of growth slipped to its lowest since June. There were some reports that political and economic uncertainty linked to the Autumn Budget had affected client confidence. Meanwhile, the rate of job creation has slowed to a 3-month low. As for the inflationary situation, construction companies recorded the fastest rise in their average cost burdens for 18 months. This was linked to a general increase in raw material prices, as well as efforts among some suppliers to pass on higher staff costs. Latest data also signalled upbeat business expectations across the construction sector, but the degree of optimism was down sharply since October and the lowest for 13 months.