UK construction sector up in February despite housebuilding slowdown
The construction industry rebounded after two months of declines as an uptick in commercial work filled the gap left by a slowdown in the housing sector, according to a closely watched survey of activity.
The latest S&P Global/CIPS construction purchasing managers’ index scored 54.6 last month, rising from 48.4 in January. Any score below 50 is considered a decline whereas anything above is seen as growth.
That shows the fastest growth since May 2022, and well above expectations of a reading around 49.1. Anything over 50 shows a rise in activity.
Business expectations for the year ahead improved further from the 31-month low seen in December. Around 46% of the survey panel anticipate a rise in construction activity over the year ahead, with only 13% predicting a decline.
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The rate of growth was the strongest since May 2022, supported by a marked rebound in commercial work and a positive contribution from civil engineering activity. But activity in the house-building sector decreased for the third month running.
Tim Moore, economics director at S&P Global Market Intelligence, said: “Business activity in the UK construction sector returned to growth during February as a rebound in commercial work and civil engineering output helped to compensate for housing market weakness.
“Some firms noted that fading recession fears and an improving global economic outlook had boosted client confidence in the commercial segment.
“At the same time, work on major infrastructure projects such as HS2 contributed to the expansion of civil engineering activity in February.”
Max Jones, director at Lloyds Bank's infrastructure and construction team, said: “A return to growth will be welcomed by contractors, who are hoping the worst of the economy's storms have passed.
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“Despite an uncertain economic picture, many in the industry feel confident. Payment times are proving resilient across supply chains, pipelines on infrastructure and commercial projects are holding up well and inflation, for materials and labour, looks to have passed its peak.
“The industry will be closely monitoring this month's Budget. While few expect the Chancellor to pull any rabbits out of his hat, clarity around future projects, particularly in the regions, will give contractors the confidence they need to plan and invest in the future.”
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