February brought an improvement in demand for Britain’s construction sector, helping the rate of new business growth reach its fastest since May 2023.
At 49.7 in February, S&P Global’s UK Construction Purchasing Managers Index (PMI) was up from 48.8 in January.
Housebuilding saw a near-stabilisation of business activity, the financial information firm noted, while residential and commercial construction also saw improving market conditions.
“A stabilisation in house building meant that UK construction output was virtually unchanged in February,” S&P economics director Tim Moore commented.
“This was the best performance for the construction sector since August 2023 and the forward-looking survey indicators provide encouragement that business conditions could improve in the coming months.”
Total new orders expanded for the first time since July last year, while optimism was at its highest since early 2022 in the face of possible interest rate cuts soon.
Employment marked the weak spot however, according to S&P, with staffing numbers dropping for the second consecutive month and at the fastest rate since late 2020.
“A recent soft patch for work on-site, alongside strong wage pressures, had led to cost-cutting measures including the non-replacement of voluntary leavers,” S&P’s report said.