Data released by S&P Global / CIPS showed that activity in the construction sector improved sharply in June, exceeding economists' forecasts, and reaching the highest level since May 2022.
UK construction PMI rose to 55.3 points from 52.2 points in June. Economists had expected a rise to 52.7 points. An index value above 50 points indicates an expansion of activity in the sector. The index demonstrates the expansion for the fifth month in a row.
The report showed that all three categories of construction saw activity increase in July. Commercial activity increased solidly, but the fastest expansion was seen in civil engineering activity, where the rate of growth quickened to the sharpest in almost 2,5 years. New orders in the construction sector rose again in July (for the 6th month in a row), while the pace of expansion was the strongest since April 2022. Employment also increased (for the 3rd month in a row), recording the strongest pace for a year. Meanwhile, a strong rise in purchasing activity was the most pronounced in almost two years. Increased demand for inputs put some pressure on suppliers in July, resulting in broadly unchanged lead times during the month. As for the inflationary situation, the rate of input cost inflation was the highest in 14 months, but still much weaker than the series average. The data also showed that construction companies remained strongly optimistic about expanding next year, although sentiment fell to a three-month low in July. Overall, about 53% of respondents predict an increase in activity over the next 12 months.