UK construction activity reaches three-month high

The UK construction industry is in its strongest position since February, despite a drop in house-building activity. 

UK Construction activity has increased at its fastest pace in three months due to improved supply conditions, according to a new report. 

The S&P Global/Cips construction purchasing managers’ index rose from 51.1 in April, to 51.6 in May. 

Impact 

The index records monthly changes in industry activity, and though a modest improvement, the increase has kept input inflation low for 32 months.

It is understood that purchasing inflation has relaxed because of rising supplier competition. 

Additionally, the availability of inputs is attributed to fewer logistic setbacks and a stable balance between supply and demand. 

New orders in 2022 came from rising demand among corporate clients and contract awards on infrastructure projects.

This aligns with April’s report where 44% of respondents anticipate a rise activity due to client demand.

Similarly, 45% of respondents from this month’s survey anticipate an increase in output, and appear to be less worried about input availability.

House-building discrepancy 

House-building acitivity is still down this month, with the number of projects at a six-month low, and that commercial projects are carrying the sector.

Factors like the cost of living and rising housing rates have contributed to fall in residential building, currently at its lowest in 14 years (42.7). 

Regarding the survey, CIPS chief economist, John Glen said: “Companies are de-stocking their built-up supplies because, with the fastest turnaround in supplier delivery times since August 2009, builders expected that demands for materials would be met should a long-awaited sustainable upturn ever arrive.”

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