Construction industry recovery gathers pace

A REBOUND in the UK’s construction industry has picked up pace with activity rising at the fastest rate in more than a year, despite a persistent slump in housebuilding.

The latest S&P Global construction purchasing managers’ index (PMI) scored 53.0 in April, up from 50.2 in March, and the highest level since February last year. Any reading above the 50.0 threshold indicates that activity in the industry is increasing.

Commercial and civil engineering work – which includes building offices and warehouses, and bigger projects such as railways, airports and stadiums – was the prominent driver of growth in April with new work increasing for the third month running. Firms saw greater demand from customers who were feeling more confident about economic conditions.

Civil engineering has regularly been the best-performing subsector, helping prop up the wider industry. On the other hand, housebuilding has consistently weighed on activity with firms feeling the knock-on effects of higher interest rates leading to weaker demand in the property market. This remained the case in April with residential housebuilding continuing to fall and construction firms seeing sluggish conditions thanks to borrowing costs remaining elevated.

Tim Moore, the economics director for S&P Global Market Intelligence, said: “The construction sector consolidated its recent return to growth in April, with total industry activity rising at the fastest pace for 14 months amid an ongoing recovery in order books. Demand was boosted by greater confidence regarding the broader UK economic outlook.”

Hiring continued to slow last month with companies keeping a tight control over their business costs.

It came as the national minimum wage increased to £11.44 at the start of April, and extended to 21- and 22-year-olds for the first time, which has increased wage pressure for businesses across the UK.

Meanwhile, companies surveyed said they continued to see an improvement in supply conditions.