UK construction companies enjoyed a sustained rebound in activity in August, according to data from S&P Global on Thursday, though the pace of this recovery moderated from July.

The headline construction purchasing managers’ index registered 53.6 in August, lower than 55.3 in July, and FXStreet-cited consensus of 54.9.

Nevertheless, the reading remained above the neutral 50.0 threshold, signalling solid expansion of overall construction output.

Commercial activity was the best-performing segment despite the pace of growth slipping. A number of firms noted a boost from rising sales enquiries and the release of new orders following the general election.

Civil engineering activity meanwhile expanded at only a moderate pace that was notably weaker than in July.

‘The UK construction sector appears to have turned a corner after a difficult start to 2024, with renewed vigour in the house building segment the most notable development in August. Residential work expanded at the fastest pace for almost two years as lower borrowing costs and a gradual recovery in market conditions helped to boost activity,’ said Tim Moore, economics director at S&P Global Market Intelligence.

‘Improving sales pipelines and a turnaround in demand conditions led to a relatively strong degree of business optimism across the construction sector. However, some firms cited a slowdown in civil engineering activity and concerns about the outlook for infrastructure work as constraints on growth expectations.’

The construction PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 150 construction companies in the UK. The responses were collected in the second half of the month.

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