Construction industry is stabilising

There are signs that the UK’s construction industry is picking up pace and for the first time in two years builders are feeling more optimistic.

In the latest S&P Global/CIPS construction purchasing managers’ index (PMI) there was a score of 49.7 last month compared to 48.8 the previous month, any score below 50 shows the sector is shrinking.

According to the survey there has been an improvement in market conditions and this has led to the foundation for residential construction work to settle.

Tim Moore, economics director at S&P Global Market Intelligence, said, “This was the best performance for the construction sector since August 2023 and the forward-looking survey indicators provide encouragement that business conditions could improve in the coming months.”

“However, a protracted downturn in activity has made construction companies cautious about their employment numbers,” Moore added.

“Staffing levels dropped for the third time in the past four months and the latest round of job shedding was the steepest since November 2020.”

Rob Wood, chief UK economist for Pantheon Macroeconomics, said, “House-buyers returning to the market as expectations of interest rate cuts have grown helped construction output to stabilise in February.

“Builders’ surging confidence in the outlook suggests construction output will grow again soon.”