UK Construction Activity Continues To Accelerate In May

The UK construction industry is going from strength to strength, with activity increasing at the fastest rate for three months. 

The S&P Global / CIPS UK Construction PMI recently registered 51.6 in May, which is the fourth consecutive month it has been above the neutral 50.0 mark. 

It is also an improvement from the 51.1 in April, demonstrating how it is getting better month-on-month. 

Tim Moore, economics director at S&P Global Market Intelligence, said: “Rising demand among corporate clients and contract awards on infrastructure projects meanwhile underpinned the fastest rise in new orders since April 2022.”

The analysis revealed construction output was driven by commercial and civil engineering activity, as housebuilding declined at the steepest rate for three years. 

Despite this, improvements in the construction industry were the result of supply conditions stabilising, the average lead times for materials shortening, and purchasing price inflation easing over the last few months. 

This has meant logistics were easier to manage, and there was an improved balance between demand and supply. 

There was also a rise in competition between suppliers, lowering prices and making them more affordable for construction companies. 

Consequently, nearly half (45 per cent) of the survey panel anticipates output to increase further over the next year, while 14 per cent expect there to be a decline. 

This is a slight improvement from the preceding month when 44 per cent said they could foresee a rise in construction output. They commented this would be the result of client demand, which has been “resilient” lately. 

If construction output does continue to grow, there will be more workers in need of black safety boots and hardhats to help the sector meet increasing demand and expand.