The UK’s construction sector continued to grow in June, despite a fall in housebuilding, according to the S&P Global UK Construction PMI report.
There was also a slower rise in new orders – some of which were linked to uncertainty surrounding the outcome of today’s election – but overall, job creation increased. Meanwhile, the rate of input cost inflation for firms accelerated from the previous month, but generally remained muted.
The organisation’s activity index fell to 52.2 in June, down from 54.7 in May. It remained above the 50 no-change mark that draws a line between contraction and expansion for the fourth month in a row.
Commercial acidity continued to be the main driver of growth, posting a marked increase again in June. However, compared to May’s two-year high, the rate of expansion was softer.
Housing was the only area to record a drop in activity, with output falling once again after May saw its first increase in 19 months.
Andrew Harker, Economics Director at S&P Global Market Intelligence, said: "Continued growth of the UK construction sector in June meant that the sector has recorded sustained expansion throughout the second quarter of the year. While there were signs of a slowdown in the latest survey period, most notably around housing activity, firms indicated that a slowdown in new order growth was in part related to election uncertainty. We may therefore see trends improve once the election period comes to an end.
Moreover, confidence in the year ahead outlook remained strong and firms increased employment to the largest extent in ten months.
In terms of inflation, there remains little sign of cost pressures picking up to any great extent, encouraging firms to expand purchasing activity. Supply-chain conditions also remained favourable."
Meanwhile, according to a separate survey, construction levels in the eurozone remain low. Activity shrank at an even faster rate in June, with the biggest slump being seen in Germany.
The PMI from Hamburg Commercial Bank fell to 41.8 in June from 42.9 in May, signalling a large drop in output across the eurozone construction sector. In fact, it is the second-strongest decline since mid-2020, beaten only by January’s number.
Italian and French construction sectors also saw big reductions, with the former posting its sharpest drop in almost two years, while the latter saw its largest fall in output since March.
