UK construction is showing promising signs of recovery, with growth in the sector reaching its highest level in over two years, according to a recent survey by S&P Global. The survey, which involved around 150 prominent companies, indicates that the industry is rebounding, particularly in new housing projects and civil engineering, after a slight dip in June. This earlier slowdown was attributed to firms holding back on major commitments due to the uncertainty surrounding the general election.
The Purchasing Managers’ Index (PMI) score, which reflects the survey’s findings, surged to 55.3 in July, up from 52.2 in June, marking the fifth consecutive month of growth. This figure not only surpassed forecasts but also highlighted the sector’s positive momentum. A score above 50 signals growth, and the latest reading indicates a strong pace of expansion.
Andrew Harker, the economics director at S&P Global, noted that the election-related slowdown in June was temporary, with a significant boost in activity and new orders in July. This improvement has been linked to better customer confidence and the resumption of paused projects.
The survey results showed growth across all key areas of the construction sector—housing, commercial building, and civil engineering. Civil engineering led the way, recording its sharpest growth in two and a half years, while new housing projects rebounded after a period of decline due to high interest rates. This uptick aligns with the new government’s push to stimulate housing development through reforms in the planning system.
Commenting on the sector’s performance, Peter Arnold, chief economist at EY UK, pointed out that the general election in 2024 introduced some volatility in month-to-month results. However, July’s positive data, including the strongest growth in new orders in more than two years and increased hiring and purchasing activity, suggests that the construction sector is entering a phase of robust recovery after facing tough challenges in recent years.
Paul Sloman of PwC echoed this optimism, describing the survey’s findings as indicative of a recovery, renewed market confidence, and overall growth in the sector. He also highlighted the ongoing challenges related to skills shortages and recruitment but noted that the fastest pace of employment growth in a year reflects the sector’s resilience and adaptability.
The construction industry’s strong performance in July signals a positive outlook, with the sector poised for continued growth as it navigates through existing challenges and seizes new opportunities.
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