Construction activity grew last month at the fastest rate since April 2022, led by a sharp uptick in civil engineering work.
September’s headline S&P Global UK Construction Purchasing Managers’ Index (PMI) reported growth for the seventh month in a row. The index figure of 57.2 is the highest in nearly two and a half years. Any number above the neutral mark of 50 represents output growth.
Civil engineering activity grew the most in September, swelling from 51.8 the month before to 59. The sector recorded the highest growth since June 2021.
Commercial building also had a strong month, with the index rising from 53.7 to 55.2. Housebuilding grew to 54.3, representing the fastest uptick in activity in two and half years.
S&P economics director Tim Moore said lower interest rates, domestic economic stability and strong pipelines of infrastructure work helped boost order books in the past few months.
Barry Goodall, head of construction at law firm Brabners, said the construction sector seemed positioned for further growth, although he warned of continued supply chain failures.
He said: “The ripple effects of ISG’s demise are likely to spread, while the financial shocks of recent years continue to be present in balance sheets.”
Other experts pointed to positive signals from the recently elected Labour government.
Jordan Smith, technical director at consultancy Thomas & Adamson, said this month’s PMI data indicated a “strong level of confidence returning to the sector”. He added that large rises in civil engineering and housebuilding suggested government commitments in investment were translating into real projects.
“It’s critical that this commitment is maintained, however, to meet the needs of the industry and avoid projects being paused or stuck in their infancy,” he added.
Terry Woodley, managing director of development finance at Shawbrook, said increasing housing targets, promises of more planning officers and a proposed relaxing of red tape were being well-received by developers.
He said: “While more detail on the expected planning reforms are needed, it is encouraging to see the government doing more to bolster the sector and bodes well for the long-term outlook.”
