Data released by S&P Global / CIPS showed that activity in the construction sector declined sharply in August, retreating from July's 26-month high and was below economists' forecasts.
UK construction PMI fell to 53.6 points from 55.3 points in July. Economists had expected a decline to 54.9 points. An index value above 50 points indicates an expansion of activity in the sector. The index demonstrates the expansion for the sixth month in a row.
The report showed that one of the three categories of construction recorded higher activity in August. Commercial activity was the best-performing segment (index at 53.7), despite the pace of growth slipping to its lowest since March. Civil engineering activity (51.8) expanded at only a moderate pace that was notably weaker than in July. Residential work was the only sub-sector to gain momentum, with growth accelerating to its fastest since September 2022 (52.7). New orders in the construction sector rose again in August (for the 7th month in a row), while the pace of expansion was much stronger than seen on average in the first half of 2024. Employment remained unchanged in August after three months of growth. Moreover, sub-contractor usage decreased for the first time since January. As for the inflationary situation, purchasing price inflation remained relatively mutated, with cost pressures easing since July. The data also showed that construction companies remained optimistic about expanding next year - confidence levels were much higher than at the same time in 2023.