The UK construction sector saw its fastest rate of growth in over two years in September, according to survey data on Friday.

The S&P Global UK construction PMI jumped to 57.2 points in September from 53.6 in August - coming in well above market consensus of 53.1, as cited by FXStreet. Rising further above the neutral 50 mark, it shows growth quickened to a 29-month high last month.

The faster rates of expansion were seen in all three subsectors. Civil engineering’s sub-PMI came in at 59.0, amid robust demand for renewable energy infrastructure and an upswing for major project work.

Commercial building’s PMI was 55.2, with firms crediting lower borrowing costs and a more stable domestic political situation as reasons clients had boosted spending. Budgets remain tight, however.

Housebuilding grew at the fastest pace since 2022, at 54.3, as market conditions improved and confidence grew.

‘New project starts contributed to a moderate expansion of employment numbers and a faster rise in purchasing activity across the construction sector in September. However, greater demand for raw materials and the pass-through of higher wages by suppliers led to the steepest increase in input costs for 16 months,’ said Tim Moore, economics director at S&P Global Market Intelligence.

Expectations for business activity in the year ahead slipped to the lowest point since April, but remained ‘upbeat’ overall.

‘Survey respondents cited rising sales enquires since the general election, as well as lower borrowing costs and the potential for stronger house building demand as factors supporting business activity expectations in September,’ Moore noted.

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. Responses were collected between September 12 and 27.

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