Data released by S&P Global / CIPS showed that activity in the construction sector unexpectedly increased in September, and reached a 29-month high. New work also expanded significantly, while business optimism edged down to the lowest since April.
UK construction PMI rose to 57.2 points from 53.6 points in August. Economists had expected a decline to 53.1 points. An index value above 50 points indicates an expansion of activity in the sector. The index demonstrates the expansion for the 7th month in a row.
The report showed that all three categories of construction recorded higher activity in September.
Civil engineering (index at 59.0) was the best-performing category. Commercial building (55.2) also gained momentum in September, with output levels rising to the greatest extent since May. Improving market conditions and rising confidence helped to boost house building in September (54.3). The latest upturn in residential work was the fastest since March 2022. New orders in the construction sector rose again in September (for the 8th month in a row), while the pace of expansion was the strongest in 2.5 years. Employment rose in September, recording the fourth increase in the last five months. Meanwhile, the latest expansion of input buying was one of the fastest seen since early-2022. Suppliers' delivery times nonetheless shortened again. As for the inflationary situation, overall input prices rose at the fastest pace since May 2023, but rates charged by subcontractors increased at the slowest pace so far in 2024. The data also showed that business activity expectations for the year ahead remained upbeat, despite slipping to the lowest since April.