The UK construction industry experienced continued growth in October, driven primarily by increased activity in civil engineering and energy infrastructure projects. According to the S&P Global Construction PMI, the sector remained above the critical 50.0 growth threshold for the eighth consecutive month, with a reading of 54.3, though this marked a slight dip from September’s 57.2. The performance outpaced the first half of 2024, which had an average PMI of 51.4, reflecting a solid expansion in industry activity.
Civil engineering emerged as the leading contributor to this growth, achieving a PMI of 56.2, with demand surging for renewable energy and other infrastructure projects. Commercial construction also expanded, albeit at a more modest pace (52.8), marking the slowest growth since April. Meanwhile, house building recorded a marginal decline, its first contraction since June, as elevated borrowing costs and uncertainties surrounding the Autumn Budget dampened demand in the residential sector.
New work continued to increase at a strong rate, although growth softened compared to September’s peak levels. Factors such as political uncertainty, cost-of-living pressures, and delayed spending decisions ahead of the Autumn Budget were cited as challenges. However, construction companies highlighted promising sales pipelines and tender opportunities, underpinned by gradually improving domestic economic conditions.
Tim Moore, economics director at S&P Global Market Intelligence, noted that while October maintained solid output growth, the momentum was slower compared to September. Strong demand for renewable energy infrastructure projects remained a significant driver, though commercial construction expanded at a more cautious pace. Residential activity faced constraints from uncertain government policies, subdued consumer confidence, and high borrowing costs, contributing to its decline.
Despite these headwinds, the sector’s order books improved in the latter half of 2024, signalling robust progress. However, business optimism for future growth was notably lower than earlier in the year, reaching its weakest level since December 2023.
Hercules Site Services plc (LON:HERC) is a collaborative, innovative company delivering services of the highest standards within the Civil Engineering sector of the construction industry. Hercules Construction Academy provides a comprehensive range of courses designed to equip individuals with the essential skills and knowledge required for a long and successful career in the construction industry.
