The report from S&P Global showed on Friday that the pace of contraction
of the companies’ activity in the UK’s construction sector eased in June.
According to the report, the S&P Global Purchasing Managers' Index
(PMI) for the UK’s construction sector increased to 48.8 in June from an
unrevised 47.9 in May. The June reading indicated the slowest decline in
construction output since the current period of shrinkage started in January.
Economists had expected the indicator to increase to 48.4. The 50 mark
divides contraction and expansion.
According to the report, commercial work decreased at the quickest pace
since May 2020 and civil engineering fell for the sixth straight month.
Meanwhile, residential building work returned to growth, although the rate of expansion
was only marginal.
New order books across the UK construction sector as a whole deteriorated
for the sixth successive month in June, with the rate of decrease accelerating
since May. This contributed to the weakest degree of business optimism across
the construction companies since December 2022. Employment continued to fall
amid lower demand and efforts to reduce overheads. Purchasing activity dropped
again, although at the weakest pace in five months, while supplier performance
improved to the greatest extent since June 2024.
On the price front, the construction sector’s purchasing costs saw a
sharp increase, though the overall rate of cost inflation eased for the third
month in a row and was the lowest since January.