UK construction growth slows despite housing drive, PMI shows
4:33 am Thursday, September 05th, 2024
LONDON (Reuters) – Growth in Britain’s construction industry slowed in August despite the biggest pickup in homebuilding in nearly two years, according to a survey on Thursday that added to signs of easing inflation pressures.
The S&P Global UK Construction Purchasing Managers’ Index fell to 53.6 from 55.3 in July, below the consensus forecast in a Reuters poll of economists of 54.9.
The survey’s gauge of housing activity rose to its highest level since September 2022, when the economic agenda of former prime minister Liz Truss sent the mortgage market into a tailspin.
But faster homebuilding was offset by a sharp slowdown in the civil engineering sector, spurred by uncertainty over infrastructure projects ahead of finance minister Rachel Reeve’s budget, due on Oct. 30.
Overall, the construction sector remained in better shape than in early 2024, supported by the Bank of England’s interest rate cut last month and the new Labour government’s plan to build 1.5 million new homes by the end the current parliamentary term
“Another robust expansion of incoming new work was recorded in August, highlighting that new project starts are set to support a broader rebound in construction activity during the months ahead,” said Tim Moore, economics director at S&P Global.
Costs faced by construction companies increased at a slower pace in August. Surveys earlier this week showed Britain’s manufacturing and services companies also reported a reduction in inflation pressures.
The all-sector PMI, which combines the services, manufacturing and construction sectors, rose to 53.8 in August from 53.3 in July, a four-month high.
(Reporting by Andy Bruce; Editing by Christina Fincher)
