UK Construction Growth Hits 3-Month High

(RTTNews) - The UK construction sector expanded at the sharpest pace in three months in May, driven by faster gains in commercial building and civil engineering activity, survey results from S&P Global showed Tuesday.

The Chartered Institute of Procurement & Supply construction Purchasing Managers' Index, or PMI, rose to 51.6 in May from 51.1 in April. The score was expected to remain stable at 51.1.

A reading above 50 suggests growth in the sector.

In May, commercial building was the best-performing sector in construction, with output rising at a robust and accelerated pace. Civil engineering works also logged the strongest growth in 11 months.

On the other hand, housing activity continued to be dampened by concerns over higher interest rates and subdued market conditions. There was a steep decline in residential construction work for the sixth consecutive month, the steepest since May 2020.

Despite this weakness in the house building sector, total new business received by German construction companies grew at the strongest pace in just over a year.

Consequently, employment increased for the fourth successive month. Nonetheless, input buying remained broadly unchanged.

Supply conditions improved notably in May, as the average lead time shortened to the greatest extent since August 2009. This development was attributed to fewer logistics bottlenecks, alongside an improved balance between demand and supply.

On the price front, cost pressures eased sharply in May, linked to rising competition among suppliers alongside softer demand for construction inputs. The rate of purchase price inflation was the weakest for just over two-and-a-half years.

The majority of construction firms remained optimistic about their growth prospects for the year ahead. Nevertheless, the degree of positive sentiment slipped to a four-month low in May.