In June, the UK’s construction sector continued to grow, albeit at a slower pace, as the latest survey showed. Despite a decline in housebuilding, the sector maintained expansion, marking the fourth consecutive month above the no-change mark of 50 in the S&P Global UK Construction Purchasing Managers’ Index (PMI), which fell to 52.2 from 54.7 in May.
The key factor behind this growth was the strong performance in commercial activity, which saw another significant rise, although the rate of expansion was slightly lower than May’s two-year high. Civil engineering activity also experienced a deceleration. On the downside, housebuilding was the only sector to register a decline, with output falling again after a brief increase in May, which was the first rise in 19 months.
New orders also grew at a slower rate, with some firms attributing the deceleration to uncertainty surrounding the upcoming election. However, job creation picked up pace, indicating a resilient labor market in the construction sector. The outlook for the year ahead remained positive, with businesses expressing confidence despite the challenges.
Inflation in input costs showed an acceleration from May but remained relatively muted, offering some relief to firms that increased their purchasing activity. Supply chain conditions were also favorable, adding to the sector’s overall stability.
The UK construction sector’s sustained growth throughout the second quarter, despite the slowdown in housing and new orders, highlights its resilience. As election-related uncertainties clear, there is potential for further improvement in the sector’s performance.
