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The UK construction sector continued to grow as a whole in May, as order books and new business rose sharply, despite the ongoing deterioration in housebuilding.
On Tuesday, the latest S&P Global/CIPS construction purchasing managers’ index rose to 51.6 points in May, from 51.1 in April. Rising further above the 50-point mark that separates expansion from contraction, it shows growth in the UK’s building sector sped up slightly over the month.
It was the fourth month in a row where activity improved, and was the strongest upturn since February. However, the performance across different construction categories varied widely.
Commercial building was the best-performing segment, seeing a sharp acceleration in output. Firms cited improving client confidence and faster decision-making for new projects.
Civil engineering also saw a strong upturn, hitting an 11-month high during the month.
However, a contraction of housing activity continued to weigh on the sector as a whole, amid worries about higher interest rates and ‘subdued’ market conditions.
‘Work on residential building projects decreased for the sixth month running and at the steepest pace since May 2020. Aside from the pandemic-related downturn, the latest reading for this category of construction activity was the lowest for just over 14 years,’ the survey read.
Total new business saw a sharp acceleration overall, despite the weak housebuilding activity, with construction order books seeing the strongest rise since April 2022.
Staff numbers continued to rise for the fourth consecutive month, as constriction companies remained upbeat about prospects for future growth.
There were also positive developments on the supply side.
‘Inflationary pressures meanwhile eased considerably in May, with purchase prices increasing to the smallest extent since September 2020. Supply chain normalisation helped to moderate cost inflation, as signalled by the strongest improvement in delivery times for construction products and materials for almost 14 years,’ explained Tim Moore, economics director at S&P Global Market Intelligence.
The UK construction PMI is compiled by S&P Global from responses to surveys sent to 150 construction companies, with data collected between May 11 and 30.
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