- Prior 48.9
UK construction activity returns to growth in July, helped by the strongest rise in commercial building since February as well as solid growth in civil engineering activity. The downside to the report is that homebuilding saw another sharp contraction on the month. Despite the optimism, new orders remain rather constrained by rising borrowing costs. S&P Global notes that:
"July data indicated that some parts of the UK construction sector gained momentum, notably commercial building and civil engineering activity. This led to a renewed rise in total construction output which, although modest, was the fastest for five months. Survey respondents commented on increased infrastructure work, office refurbishments, and resilient demand for a range of commercial projects.
"Meanwhile, another steep reduction in house building acted as a severe constraint on construction growth. Around 35% of the survey panel reported a decline in residential work during July, while only 18% signalled a rise. Lower volumes of housing activity have been recorded in each month since December 2022, with construction companies widely reporting subdued sales due to rising interest rates and worries about the economic outlook.
"Supply conditions improved considerably in July, as a combination of weaker demand and replenished stocks meant that delivery times shortened to the greatest extent since 2009. As a result, input prices inflation was much lower than seen on average in the first half of the year, but there were still many reports from construction firms that higher wages costs had put upward pressure on business expenses."
