UK construction activity rose last month at fastest pace in two years

Activity in the UK construction sector rose at its fastest pace in two years last month (May), according to a new report.

The headline S&P Global UK Construction Purchasing Managers’ Index showed above the 50.0 no-change mark for the third month running in May to signal a sustained expansion in activity midway through the second quarter of the year.

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"Particularly pleasing was the broad-based nature of the rise in activity as work on
housing projects increased for the first time in more than a year-and-a-half," noted Andrew Harker, economics director at S&P Global Market Intelligence.

"Firms are gearing up for further growth in the months ahead, posting renewed expansions in both employment and purchasing activity as workloads increase," he added.

"Moreover, the supply-chain environment continued to improve in May. Companies were able to secure inputs much more quickly than in April and at prices that were only slightly higher than in the previous month on average.

"These factors should help constructors in their efforts to ramp up operations in line with greater new order inflows."

According to survey respondents, the increase in total construction activity reflected the sustained growth of new orders.

New business rose for the fourth consecutive month, and at a solid pace that was the fastest for a year as demand improved.

In particular, firms linked higher new orders to the winning of new contracts and the start of previously delayed projects.

In addition, with supply-chain conditions improving, companies noted only a marginal increase in input costs during May, with the rate of inflation the softest in the current five-month sequence of rising input prices.